U.S. agrees to abide by NAFTA panel decision on Canadian softwood

Global News ^ | 10-Sep-2004 | Canadian Press

[drtom]

VANCOUVER (CP) -- A U.S. trade body has agreed to comply with a NAFTA panel ruling concluding Canadian softwood lumber imports are no threat to the U.S. industry.

In a response to the panel decision earlier this month, the U.S. International Trade Commission said it would conclude that "the U.S. softwood lumber industry is not threatened with material injury" by the Canadian imports.

But the commission made it clear in a statement Friday it wasn't happy about doing so.

"We disagree with the (NAFTA) panel's view that there is no substantial evidence to support a finding of threat of material injury and we continue to view the panel's decisions throughout this proceeding as overstepping its authority, violating the NAFTA, seriously departing from fundamental rules of procedure and committing legal error."

As well, the U.S. retains the right to mount a so-called extraordinary challenge under NAFTA. It has done so in the past on other matters, but has never won.

On Aug. 31, the U.S. case for levying harsh duties against Canadian softwood lumber imports took what may be a fatal blow from the North American Free Trade Agreement review panel.

The panel rejected claims allegedly subsidized Canadian lumber posed a threat of injury to American producers.

International Trade Minister Jim Peterson said he's "pleased" with the commission's decision, though federal officials acknowledged the commission's grudging tone.

"This determination eliminates the United States' basis for imposing anti-dumping and countervailing duties," Peterson said in a statement.

"It is now time for the U.S. to revoke the anti-dumping and countervailing duties imposed on Canadian softwood lumber exports and bring an end to this dispute which is long overdue."

John Allan, president of the B.C. Lumber Trade Council, said the decision means the process can now begin for the U.S. to repay $2.6 billion in duties.

"This is a home run," Allan said. "This is a case-winning decision. We won it all today with this decision."

He said if a challenge does come, he expects it by November.

But, Allan said, he doesn't see any grounds for a challenge.

"The U.S. lumber market is pretty angry with all these processes going against them," he said. "They've basically driven us to be a much more efficient Canadian industry much to their detriment."

In unusually strong language, the NAFTA panel ordered that the U.S. International Trade Commission agree the Canadian imports do not amount to a threat of injury and ordered the commission to conform to that position by Sept. 9.

This was the third time the NAFTA panel had looked at the U.S. Commerce Department's threat-of-injury argument. The panel sent back the two previous attempts for review.

It also scolded the commission for refusing to follow the NAFTA panel's instructions on the previous review, saying U.S. authorities had no fresh evidence to back their claims.

A further review would be "an exercise in futility," the panel said.

However, the U.S. continued to maintain the NAFTA panel does not have the power to order the U.S. trade body to change its findings. Also, opponents have charged one American panellist violated ethical standards in an unrelated case.

Canadian lumber producers ship about $10 billion worth of softwood a year to the United States for home construction and renovation, holding about 34 per cent of total market share.

American lumber producers have long contended Canadian imports are subsidized by low Crown timber-cutting fees, known as stumpage, and other provincial forestry policies.

In April 2001, the producers launched their fourth trade complaint in two decades, resulting an 18.79 per cent countervailing duty and an 8.2 per cent anti-dumping duty.

The levies were cut in half by a series of NAFTA rulings and recalculations by the U.S. Commerce Department. But the lower levies wouldn't take effect unless and until the duties are confirmed.

[1rudeboy]

We did just fine in Trade long before NAFTA existed we will do fine long after NAFTA expires.

This kind of a statement, on its face, should disqualify you from any thread regarding trade, or economics, for that matter.

[albertabound]

So is your lack of concern for reality. It is just so much more fun to be a sarcastic cynic isn't it.

[Former Proud Canadian]

You are welcome to go after Airbus, in fact you are welcome to it. They are made in Europe, not Canada.