NAFTA ruled again in favour of Canada in the long-running softwood lumber dispute, directing the U.S. Department of Commerce (DOC) to reduce the duty applied to Canadian lumber imports.
“It’s high time that the United States accept that Canadian lumber is not subsidized,” said International Trade Minister Jim 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.”
Wednesday’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.
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.
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