December 6, 2005
No. 243
The United States Department of Commerce (DOC) issued the results of its annual
administrative reviews today, reducing duties on Canadian softwood lumber.
The reviews determined a new countervailing duty (CVD) rate of 8.7 percent (down
from the current 16.37 percent) and a new “all others” anti-dumping duty (AD) rate of
2.11 percent (down from the current 3.78 percent), for a total of 10.81 percent.
Under the U.S. duty assessment system, CVD and AD cash deposits for shipments
made during previous years are assessed and finalized through annual administrative
reviews. The new rates issued today are for shipments made during the following
periods of review: CVD order—April 1, 2003, to March 31, 2004; AD order—May 1,
2003, to April 30, 2004.
Administrative reviews also establish the new cash deposit rates for future shipments of
softwood lumber products to the United States, regardless of ongoing litigation. The
new rates will take effect when the DOC issues instructions to U.S. Customs, which
should happen within the next two weeks.
The reduction in these rates may bring some relief to Canadian softwood lumber
exporters, and, as such, is a positive development. However, it is important to recall
that as a result of the NAFTA Extraordinary Challenge Committee (ECC) decision in the
threat of injury case, the United States is legally obligated to revoke the CVD and AD
orders, refund all duties collected with interest, and terminate all ongoing administrative
reviews.
Canada will be closely examining the administrative review results and consulting with
the provinces and industry regarding next steps.
The results of the first administrative review, published in December 2004, dropped the
rates to 20.15 percent from the original 27.22 percent. Canada challenged the CVD
administrative review results under NAFTA. The Canadian softwood lumber industry is
challenging the AD administrative review results before the U.S. Court of International
Trade.
More information on softwood lumber issues is available at:
http://www.softwoodlumber.gc.ca.
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Backgrounders are attached.
For further information, media representatives may contact:
Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca
Backgrounder
U.S. DEPARTMENT OF COMMERCE FINAL RESULTS OF
SECOND ADMINISTRATIVE REVIEWS
On December 6, 2005, the U.S. Department of Commerce (DOC) released the final
results in the second annual administrative reviews of the anti-dumping (AD) and
countervailing (CVD) duty orders on softwood lumber imports from Canada,
determining a rate of 10.81 percent.
The DOC has determined a final, countrywide CVD rate of 8.7 percent for the period
covered by the review. Lumber produced from logs harvested in the Maritime provinces
is excluded from the CVD order.
The DOC also determined an “all others” AD rate of 2.11 percent. In addition, the DOC
made company-specific findings for the following companies that were investigated
during the course of the administrative review: Abitibi Consolidated Inc.: 2.52 percent,
Buchanan Forest Products: 2.86 percent, Canfor Corporation: 1.36 percent, Tembec
Inc.: 4.02 percent, Tolko Industries Ltd.: 3.09 percent, Weldwood of Canada Ltd.:
0.61 percent, West Fraser Timber Co. Ltd: 0.51 percent, and Weyerhaeuser Company:
4.43 percent.
Under the retrospective U.S. trade remedy system, the DOC conducts annual reviews
of AD and CVD orders. These reviews assess the alleged level of dumping or subsidies
during a previous period. The CVD review covered shipments made during the period
of April 1, 2003, to March 31, 2004, while the AD review covered shipments made
during the period of May 1, 2003 to April 30, 2004. The duty cash deposits for future
shipments will be adjusted to the rates resulting from the administrative review once the
determinations are published in the U.S. Federal Register.
The final results in these administrative reviews may be subject to binding dispute
settlement under NAFTA Chapter 19 or before the U.S. Court of International Trade
(CIT), and potentially at the World Trade Organization (WTO).
For exporters that requested an anti-dumping administrative review and for all exporters
that paid countervailing duties, final duties for the corresponding period will be
assessed at the new administrative review rates unless exporters request a NAFTA or
CIT challenge, in which case assessment is suspended during litigation.
The first administrative reviews of the CVD and AD duty orders were initiated on July 1,
2003. The DOC found a countrywide CVD rate of 16.37 percent (slightly down from the
original 18.79 percent) and a new “all others” anti-dumping duty rate of 3.78 percent
(down from the original 8.43 percent), for a total of 20.15 percent.
On June 30, 2004, the DOC initiated the second administrative reviews. Preliminary
results were published on June 7, 2005. The DOC found a countrywide CVD rate of
8.18 percent and an AD “all others” rate of 2.44 percent. In its June 2005 preliminary
determination of the CVD order, the DOC used a “Maritimes stumpage benchmark,” as
it did in the first administrative review, for determining whether provincial stumpage
programs, except for in British Columbia, confer a subsidy on Canadian lumber
producers. U.S. log prices were used as a benchmark to determine whether stumpage
programs in British Columbia confer a subsidy.
Backgrounder
CHRONOLOGY OF KEY EVENTS
April 23, 2001: The United States Department of Commerce (DOC) initiated its
countervailing and anti-dumping investigations into imports of softwood lumber from
Canada.
April 2, 2002: The DOC published its final affirmative determinations of subsidy and
dumping in the Federal Register.
May 2, 2002: The U.S. International Trade Commission (ITC) voted 4 to 0 that the U.S.
softwood lumber industry was “threatened” with material injury by reason of imports of
softwood lumber from Canada that were found by the DOC to be subsidized and sold in
the U.S. at less than fair value.
May 22, 2002: The DOC published the countervailing duty order in the Federal
Register. Companies were required to provide cash deposits to the U.S. Customs
Service for countervailing and anti-dumping duties.
July 1, 2003: The DOC initiated the first administrative reviews of the anti-dumping and
countervailing duty orders.
June 14, 2004: The DOC published the preliminary results of the first administrative
reviews of the countervailing and anti-dumping orders.
June 30, 2004: The DOC initiated the second administrative reviews of the
anti-dumping and countervailing duty orders.
December 14, 2004: The DOC published the final results of the first administrative
reviews of the countervailing and anti-dumping orders.
June 7, 2005: The DOC published the preliminary results of the second administrative
reviews of the countervailing and anti-dumping rates.
June 30, 2005: The DOC initiated the third administrative reviews of the anti-dumping
and countervailing duty orders.
December 6, 2005: The DOC published the final results of the second administrative
reviews of the countervailing and anti-dumping orders.
Other key dates
August 10, 2005: The NAFTA Extraordinary Challenge Committee in the threat of
injury case issued its decision unanimously rejecting U.S. claims and affirming a
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.
November 22, 2005: The DOC issued its fifth remand determination in the NAFTA
CVD case and found a new subsidy rate of 0.80 percent, or de minimis.
