The U.S. Department of Commerce announced on Tuesday it will comply with a NAFTA panel's decision to cut U.S. duties on imports of Canadian softwood lumber. The punitive duties, which average about 16 percent, will be reduced to 0.80 percent. Separate antidumping tariffs averaging about 4 percent will not be affected.
Although the duties will be cut, U.S. officials still disagree with the NAFTA Panel's rationale. “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 M. 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.”
Under NAFTA procedures, there will be a briefing schedule to allow parties to comment on the Department's remand determination. This would occur over the next 25 - 45 days, which means the current tariffs will continue to be collected during this period. U.S. officials also said they retain the right to appeal the ruling.
Canada’s International Trade Minister Jim Peterson said he was encouraged by the news that the U.S. Department of Commerce has finally issued a determination on countervailing duties that supports Canada’s long-standing position that Canadian softwood lumber is not subsidized.
“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,” said the Minister. “This is a positive move and one that Canadians should rightly see as a vindication of our strong position.”
The Minister added, “This first step is encouraging, but a complete victory will not have been secured until the duties improperly collected have been returned—until all duties are eliminated.” Since 2002, some $5 billion in duties has been collected illegally, according to the Canadian Department of International Trade.
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