October 5, 2005
No. 175
International Trade Minister Jim Peterson today urged the United States to live up to its
commitments on softwood lumber, even as he welcomed the latest in a series of
NAFTA panel rulings, all of which have found the U.S. countervailing duty
determinations on Canadian softwood lumber to be illegal.
“It’s high time that the United States accept that Canadian lumber is not subsidized,”
said Minister Peterson. “The U.S. should live up to its NAFTA obligations, rather than
continuing to cater to narrow protectionist interests in the U.S. lumber industry. The
U.S. must stop imposing duties and refund the deposits collected to date.”
Today’s NAFTA panel ruling represents the fifth time the panel has directed the U.S.
Department of Commerce (DOC) to correct its subsidy determination—already reduced
from 18.79 percent to 1.21 percent.
In order to apply countervailing duties, U.S. law requires a finding that a U.S. industry is
being materially injured or threatened with injury as a result of subsidized imports. On
August 10, 2005, a NAFTA Extraordinary Challenge Committee (ECC) confirmed that
the United States did not meet this requirement, legally obligating it to revoke the duty
orders, refund deposits collected and terminate all ongoing administrative reviews.
Canada is now challenging the U.S. failure to comply with the ECC decision before the
U.S. Court of International Trade.
“Canada continues to explore every possible option for resolving this dispute,” said
Minister Peterson, adding that further litigation, possible retaliation and sustained
advocacy are key elements of the Canadian strategy. “Just yesterday, I discussed
Canada’s approach with my provincial counterparts, who have agreed to continue
working together to maintain a strong and unified Canadian position.”
Despite repeated NAFTA rulings rejecting the U.S. allegations, Canadian exporters
continue to pay an unjustified 20.15 percent in duties on softwood lumber shipped to
the U.S. Since 2002, some $5 billion in duties have been collected illegally.
Minister Peterson also added that he appreciates Mexico’s statement that NAFTA
dispute panels must be respected. He looks forward to the next NAFTA Commission
meeting, which has been pushed back due to scheduling conflicts.
For more information regarding Canada’s legal challenges against the United States at
the WTO and under NAFTA, please visit
http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp.
For more information regarding softwood lumber issues in general, please visit
http://www.softwoodlumber.gc.ca.
The NAFTA panel decision is available at http://www.nafta-sec-alena.org.
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For further information, media representatives may contact:
Jacqueline LaRocque
Director of Communications
Office of the Minister of International Trade
(613) 992-7332
Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca
Backgrounder
CANADA’S NAFTA CHALLENGE OF THE U.S. DEPARTMENT OF
COMMERCE’S FINAL COUNTERVAILING DUTY DETERMINATION:
CHRONOLOGY OF KEY EVENTS
April 2, 2001
The United States Department of Commerce (DOC) initiated its countervailing duty
investigation of Canadian softwood lumber.
March 22, 2002
The DOC made a final affirmative countervailing duty determination and imposed an
18.79 percent duty on Canadian softwood lumber imports.
April 2, 2002
A binational panel was established under NAFTA Chapter 19 to review whether the
DOC’s final affirmative countervailing determination was contrary to U.S. law.
August 13, 2003
The panel issued its first report and instructed the DOC to correct its original
countervailing duty determination.
January 12, 2004
The DOC released its countervailing duty remand determination and found a new
subsidy rate of 13.23 percent. The DOC’s remand determination was subsequently
challenged by Canada.
June 7, 2004
The panel issued its second report and again instructed the DOC to issue a
determination consistent with U.S. law.
July 30, 2004
The DOC issued its second remand determination and found a new subsidy rate of
7.82 percent. The DOC’s remand determination was subsequently challenged by
Canada.
December 1, 2004
The panel issued its third report and again instructed the DOC to issue a determination
consistent with U.S. law.
January 24, 2005
The DOC issued its third remand determination and found a new subsidy rate of 1.88
percent. The DOC’s remand determination was subsequently challenged by Canada.
May 23, 2005
The panel issued its fourth report and again instructed the DOC to issue a
determination consistent with U.S. law.
July 7, 2005
The DOC issued its fourth remand determination and found a new subsidy rate of 1.21
percent. The DOC’s remand determination was subsequently challenged by Canada.
August 10, 2005
The NAFTA Extraordinary Challenge Committee in the threat of injury case issued its
decision unanimously rejecting U.S. claims and affirming the NAFTA panel’s ruling 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.
October 5, 2005
The panel issued its fifth report and again instructed the DOC to issue a determination
consistent with U.S. law.
