“Memorandum of understanding” between United States and Canada to resolve dispute on trade in solar products

The memorandum of understanding constitutes a resolution of the outstanding dispute.

Resolve dispute on trade in solar products

The Office of the U.S. Trade Representative (USTR) today issued a release announcing a memorandum of understanding between the United States and Canada to settle a dispute on trade in solar products under the trade agreement known as “USMCA.”

Background

The United States in early 2018 imposed a solar safeguard measure to support the U.S. domestic solar industry’s efforts to adjust to import competition (that was primarily attributable to excess solar cell and module capacity by Chinese producers in China and around the world and exacerbated by China’s non-market practices). The safeguard measure was established after the U.S. International Trade Commission (ITC) found that the domestic solar industry was seriously injured by increased imports.

President Biden in February 2022 extended the solar safeguard measure for an additional four years and directed the U.S. Trade Representative to conclude agreements with Canada and Mexico with regard to trade in solar products. A USMCA panel in February 2022 issued its report finding that the prior U.S. administration’s decision to include imports from Canada in the solar safeguard measure was inconsistent with certain USMCA rules. 

Memorandum of understanding

The memorandum of understanding with Canada, announced today, constitutes a resolution of the outstanding dispute.

According to today’s USTR release, the memorandum of understanding promotes greater North American solar supply integration and reaffirms both the United States’ and Canada’s commitment to prohibit imports of solar products produced in whole or in part with forced or compulsory labor.

The memorandum of understanding also contains a mechanism so that solar product imports from Canada do not undermine the existing U.S. safeguard measure on imports of solar products. 

What’s next?

Officials from the United States and Canada will sign the memorandum of understanding on July 8, 2022. Text of the memorandum of understanding between the United States and Canada on trade in solar products will be available after it is signed.


For more information, contact a professional with KPMG’s Trade & Customs services:

Doug Zuvich
Partner and Global Practice Leader
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
E: labad@kpmg.com

Irina Vaysfeld
Principal
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
E: aahanchian@kpmg.com

Christopher Young
Principal
E: christopheryoung@kpmg.com

Gisele Belotto
Principal
E: gbelotto@kpmg.com

George Zaharatos
Principal
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
E: adoornaert@kpmg.com

Jessica Libby
Principal
E: jlibby@kpmg.com

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