Vive Le Canada

Softwood Lumber Ruling in Canada's Favor No Break for Forests
Date: Thursday, November 24 2005

Softwood Lumber Ruling in Canada's Favor No Break for Forests
WASHINGTON, DC, November 23, 2005

(ENS) - After more than four years of claiming that Canadian softwood lumber production was subsidized by the Canadian government, the Bush administration acknowledged Tuesday that it was not. The government of Canada said it was encouraged by the move, and will now attempt to recover more than C$5 billion worth of import duties collected by the United States.

International Trade Minister Jim Peterson said, “The government of Canada welcomes this important step by the U.S. Clearly, the Bush administration has heard the vigorous appeals from Canada that they must respect the terms of NAFTA.”

Jim Peterson is Canada's International Trade Minister. At the core of the dispute is the U.S. claim that Canada subsidizes its logging industry and the Canadian counter-claim that it does not. Defenders of Wildlife, a U.S. nonprofit organization, says "environmentalists on both sides of the border have documented the existence of Canadian forestry subsidies and their environmentally harmful nature."

But a panel established under the North American Free Trade Agreement (NAFTA) to resolve the long-standing dispute ruled for the fifth time in October that the United States had no basis on which to find that the U.S. lumber industry was threatened by imports of Canadian softwood lumber.

The decision of the NAFTA Extraordinary Challenge Committee, made up of U.S. and Canadian judges, legally requires the United States to revoke the countervailing and anti-dumping duty orders, to refund, with interest, deposits collected, and to stop all ongoing administrative reviews, but the United States is not yet ready to go that far.

"We have serious concerns about the panel's decision. However, consistent with our NAFTA obligations, we have complied with the panel's instructions," said Commerce Secretary Carlos Gutierrez. "We will continue to enforce our trade laws to ensure that U.S. industry receives relief from unfair imports and we are reviewing all options to do so. We believe that only a durable, negotiated resolution will resolve this dispute permanently."

Commerce Secretary Carlos Gutierrez says Canadians must still pay the current rate of duties to import softwood lumber into the United States. Although the Commerce Department does not agree with the panel's reasoning, the department has obeyed the panel's instructions and calculated a countrywide subsidy rate of 0.80 percent.

But still, the Commerce Department said it will continue to require that Canadian companies that want to sell softwood lumber into the United States pay the same rate of duty, an average of 20.96 percent, as they have been paying until now.

The department says it is involved in administrative reviews of previous NAFTA panel decisions on softwood lumber and will not change its duties until these reviews are complete and a public comment period of up to 45 days is over. U.S. officials also said they retain the right to appeal the ruling.


This article comes from Vive Le Canada

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