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NAFTA PANEL ISSUES SOFTWOOD LUMBER RULING
 
WASHINGTON, DC - A North American Free Trade Agreement panel has ruled that the US had not proven that American companies were threatened with injury from Canadian shipments of softwood lumber.
 
The panel instructed the US International Trade Commission (ITC) to quickly come up with new justifications for the injury finding.
 
The question of injury is key to whether the US can continue to impose anti-dumping and countervailing duties against $6 billion worth of Canadian wood sold in the US each year. Those duties have averaged around 27% since 2001.
 
US government officials were not immediately available for comment.
 
As this trade dispute continues to be argued before both NAFTA and World Trade Organization panels, US and Canadian government officials are expected to weigh whether to launch another round of negotiations to settle the case.
 
Last year, the two governments discussed replacing the American duties with a new import quota on Canadian spruce, pine, fir and other woods used to build and remodel houses.
 
Canadian companies have awaited this decision, hoping it could strengthen their position in any negotiation.
 
"If the Americans can't prove injury to their industry then they don't have anything under their countervailing and antidumping claims," said a Canadian government official, who asked not to be identified.
 
CHINA MUST REFORM, SAYS COMMERCE SECRETARY

WASHINGTON, DC - Appealing to China's desire for market economy status will better motivate that country to reform its labor standards and currency policies than threatening trade petitions, said Secretary of Commerce Donald Evans in a recent press conference on US trade relations with China.

"We all know that obtaining market economy status is a high priority for the Chinese leadership. Without this status, China is subject to more antidumping cases with higher duties on their imports," Evans said.

Countries "must meet six criteria under the Tariff Act of 1930 to be designated as market economies," he said, highlighting labor standards and currency policies as the two issues demanding the most attention.

"[T]he law is clear: China will fail to meet Market Economy status until market forces set labor and currency rates," the secretary said.

Evans noted that US exports to China have grown significantly in recent years, but he warned that this progress "would be jeopardized by a blunt instrument" such as the AFL-CIO's recent petition for high tariffs on Chinese products and investigation of China's labor practices.

"Promoting economic engagement - not economic isolation - is the best way to raise labor standards and living standards in China," he said.

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