NAFTA panel rules against Canadian softwood

By Ottawa Business Journal Staff

Thu, Jul 17, 2003 4:00 PM EST

A NAFTA dispute panel has upheld U.S. anti-dumping duties on Canadian softwood lumber, ruling that the U.S. Department of Commerce acted lawfully when it imposed the duties.

However, the panel gave the department 60 days to clarify some issues, raising the possibility that the department may have to re-calculate some of the average 8.63% duties on Canadian lumber shipped to the United States.

The five-member panel, which included three Canadian judges, rejected claims by several Canadian forestry companies that the Commerce Department's investigation was initiated contrary to the requirements of the anti-dumping legislation. They argued the department had neglected information on Canadian prices that was readily available to it.

"The panel determines that Commerce acted within its lawful authority in proceeding with an anti-dumping investigation following initiation," the decision said.

While the ruling is bad news for Canadian lumber exporters, it was hailed as a victory by a coalition of American consumer groups, who hope it prompts Washington to lower the duties.

"This NAFTA decision is yet another in a series of rulings that reaffirm that the Department of Commerce action in imposing anti-dumping and countervailing duties on softwood lumber is wrong," said Susan Petniunas, spokesperson for the American Consumers for Affordable Homes (ACAH), an alliance of U.S. consumer groups and companies.

"Clearly, this is another victory for consumers and affordable housing in the U.S.," Petniunas added. "The protectionist U.S. lumber companies and southern landowners once again have lost their arguments. We urge the Bush administration to accept this new defeat, and work toward a long-term solution to this decades old problem quickly."

The anti-dumping duties are applied to about US$6 billion worth of lumber exported to the United States.

Meanwhile, a second NAFTA tribunal ruling---this one on countervailing duties against Canadian lumber--has been postponed to Aug 15. The U.S. imposed countervailing duties averaging 18.79 per cent on softwood lumber, used in construction, alleging that Canada's provinces subsidize timber producers.