NEWS RELEASES

October 28, 2005 (8:40 p.m. EDT)
No. 200

U.S. DELAYS RESPONSE TO COUNTERVAILING DUTY DETERMINATION

International Trade Minister Jim Peterson today expressed regret at the U.S. decision to seek further clarification from the NAFTA countervailing duty (CVD) panel.

The U.S. Department of Commerce (DOC) has asked for clarification from the NAFTA CVD panel, following the panel’s instructions that the U.S. correct its subsidy determination. In Canada’s view, following the panel’s instructions would result in a de minimis finding and effectively eliminate the basis for duties on Canadian softwood lumber.

“We strongly regret the delay, but we are confident that the NAFTA panel will act fairly and respond as soon as possible,” said Minister Peterson. “Further delay will not help anyone: it won’t help Canadian producers, nor will it help American consumers who already pay too much for their homes.”

On October 5, 2005, for the fifth time, the NAFTA CVD panel asked the Department of Commerce to correct its July 2005 subsidy determination and make it consistent with U.S. law. On July 7, 2005, the DOC had found a new subsidy rate of 1.21 percent, still above the de minimis level.

The Minister reassured Canadians that Canada will stand firm in asking the United States to show respect for NAFTA.

“It is up to the U.S. to show that the institution of NAFTA means something,” said Minister Peterson. “Rules are rules, you can’t just pick and choose.”

Canada will stay the course by pressing its case through litigation, retaliation and advocacy. It will also continue to seek opportunities in markets elsewhere.

In addition, Minister Peterson will hold a series of meetings in Toronto on Monday, October 31, 2005 with:

•         Canada’s U.S. legal team, which is working actively on a number of fronts including the case before the U.S. Court of International Trade in which Canada is challenging the U.S. failure to comply with the Extraordinary Challenge Committee (ECC) decision on threat of injury, and the defence of Canadian interests in the U.S. Coalition for Fair Lumber Imports’ challenge to the constitutionality of NAFTA’s Chapter 19; and

•         Canadian CEOs to discuss the challenges facing NAFTA, as part of the ongoing consultation with provinces and stakeholders.  

Canadian exporters continue to pay an unjustified 20.15 percent in duties on softwood lumber shipped to the U.S. Since 2002, some C$5 billion in duties have been collected illegally.

“We are going to continue all efforts to recover the duties. The NAFTA ECC has spoken clearly and definitively,” said the Minister.

For more information regarding Canada’s legal challenges against the United States at the WTO and under NAFTA, please visit http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp.

For more information regarding softwood lumber issues in general, please visit http://www.softwoodlumber.gc.ca.

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For further information, media representatives may contact:

Jacqueline LaRocque
Director of Communications
Office of the Minister of International Trade
(613) 992-7332

Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca

Backgrounder

CHRONOLOGY OF KEY EVENTS: CANADA’S NAFTA CHALLENGE OF THE U.S. DEPARTMENT OF COMMERCE’S FINAL COUNTERVAILING DUTY DETERMINATION

April 2, 2001: The United States Department of Commerce (DOC) initiated its countervailing duty investigation of Canadian softwood lumber.

March 22, 2002: The DOC made a final affirmative countervailing duty determination and imposed an 18.79 percent duty on Canadian softwood lumber imports.

April 2, 2002: A binational panel was established under NAFTA Chapter 19 to review whether the DOC’s final affirmative countervailing determination is contrary to U.S. law.

August 13, 2003: The NAFTA panel issued its first report and instructed the DOC to correct its original countervailing duty determination.

January 12, 2004: The DOC released its countervailing duty remand determination and found a new subsidy rate of 13.23 percent. The DOC’s remand determination was subsequently challenged by Canada.

June 7, 2004: The NAFTA panel issued its second report and again instructed the DOC to issue a determination consistent with U.S. law.

July 30, 2004: The DOC issued its second remand determination and found a new subsidy rate of 7.82 percent. The DOC’s remand determination was subsequently challenged by Canada.

December 1, 2004: The NAFTA panel issued its third report and again instructed the DOC to issue a determination consistent with U.S. law.

January 24, 2005: The DOC issued its third remand determination and found a new subsidy rate of 1.88 percent. The DOC’s remand determination was subsequently challenged by Canada.

May 23, 2005: The NAFTA panel issued its fourth report and again instructed the DOC to issue a determination consistent with U.S. law.

July 7, 2005: The DOC issued its fourth remand determination and found a new subsidy rate of 1.21 percent. The DOC’s remand determination was subsequently challenged by Canada.

August 10, 2005: The NAFTA Extraordinary Challenge Committee in the threat of injury case issued its decision unanimously rejecting U.S. claims and affirming the NAFTA panel’s ruling that the United States had no basis on which to find that the U.S. lumber industry was threatened by imports of Canadian softwood lumber.

October 5, 2005: The NAFTA panel issued its fifth report and again instructed the DOC to issue a determination consistent with U.S. law.