US Slams New Canadian Lumber Subsidies
USTR, Commerce Secretary bemoan Canada's new $1.28 billion assistance package
WASHINGTON, DC - 12/08/05 - The US is "very disappointed" at Canada's recent announcement of a new $1.28 billion assistance package for its lumber industry, according to US Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez.
The two US officials said that the new package reflects Canada's continued commitment to subsidizing its lumber industry and will complicate efforts to resolve a two-decade-old bilateral dispute over softwood lumber subsidies.
"Canada's actions illustrate what the United States has been saying all along: the Canadian industry is the beneficiary of subsidies that create an un-level playing field to the detriment of the US industry," Portman said.
"While we continue to believe that a long-term, durable settlement is the only way to resolve this dispute, Canada's actions complicate our attempts to reach a negotiated solution," he said.
The Bush Administration has said it will consult with lumber industry representatives to gather information about the potential impact of the subsidies, which are in addition to the subsidies to the Canadian softwood lumber industry the Department of Commerce has previously identified.
On November 15, a World Trade Organization dispute settlement panel rejected a Canadian challenge to a US determination that the US lumber industry is threatened by dumped and subsidized Canadian lumber imports.
Those findings were made in response to a direction from a dispute settlement panel established under Chapter 19 of the North American Free Trade Agreement (NAFTA).
The new subsidy announcement follows a decision earlier this week by the DOC in which it found that the subsidy margin during the period of investigation used for the current countervailing duty order was de minimis.
The dispute over trade in softwood lumber stretches back more than two decades.
The US first imposed countervailing (CVD) and antidumping (AD) duties on imports of softwood lumber from Canada in 2002.
The DOC activated the AD/CVD orders after it found that the Canadian federal government and several Provincial governments subsidized Canadian softwood lumber producers and that softwood lumber was being dumped on the US market, and after the US International Trade Commission found that dumped and subsidized imports from Canada threatened to injure the US softwood lumber industry.
The AD/CVD orders are the subject of approximately 24 separate legal actions initiated by the Government of Canada, several Canadian provinces, and industry.
Other proceedings under the WTO, the NAFTA, and the US Court of International Trade are also currently underway.
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