NEWS RELEASES
STATEMENT BY THE HONOURABLE PIERRE PETTIGREWON U.S. DECISIONS ON SOFTWOOD LUMBER
August 10, 2001 (1:45 p.m. EDT) No. 117
STATEMENT BY THE HONOURABLE PIERRE PETTIGREW
ON U.S. DECISIONS ON SOFTWOOD LUMBER
The U.S. Department of Commerce today issued its preliminary determination of
subsidy in its countervailing duty investigation of softwood lumber from Canada. The
Department of Commerce found that Canadian softwood lumber exports to the U.S.
were subsidized by 19.31 percent. The U.S Department of Commerce also found that
Canadian softwood lumber was exported to the U.S. above the allowable 15 percent
threshold resulting in a finding of "critical circumstances." This means that Canadian
softwood exporters will be required to post bonds retroactively to mid-May 2001.
These two decisions by the U.S. Department of Commerce have no basis in fact or in
law. Given the documentation supplied by Canadian governments and industry refuting
the allegations of subsidy and the export monitoring data provided on Canadian
softwood lumber, the finding of subsidy and the methodology used by the U.S. to
determine critical circumstances reflect a protectionist approach.
Canadian softwood lumber exports to the U.S. are not subsidized by federal and
provincial programs. In the previous cases over the past 20 years, U.S. industry has not
been able to sustain its subsidy and injury allegations against Canada. As the provinces
have increased their stumpage rates, among other elements, since the previous
investigation, the U.S. preliminary determination is not sustainable.
Regarding critical circumstances, the Department of Commerce ignored the fact that
there are no export subsidies in this case. U.S. Census Bureau import data show that
Canadian shipments have only increased by 11.3 percent during the second quarter of
2001 compared with the same quarter in 2000.
The Department of Commerce reached its conclusion by ignoring compelling evidence
to the contrary: the U.S. Government ignored factors such as the growth of the U.S.
housing market, increased U.S. demand and consumption of lumber, strong lumber
prices and U.S. production.
The Government of Canada will continue to defend the rights of the Canadian softwood
lumber industry. We have anticipated that the U.S. government could go this route and
together with industry, and the provinces, we are prepared for the legal battle. We will
continue to consult closely with industry stakeholders and provincial governments to
determine next steps. In fact, I will be discussing this issue with my provincial
counterparts early next week.
This is not going to be easy for Canadian workers and for American consumers. But I
stand by our industry's competitiveness and the need for free trade.
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For further information, media representatives may contact:
Sébastien Théberge
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
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