NEWS RELEASES

December 6, 2005 (4:25 p.m. EST)
No. 243

U.S. DEPARTMENT OF COMMERCE TO LOWER SOFTWOOD LUMBER DUTIES

The United States Department of Commerce (DOC) issued the results of its annual administrative reviews today, reducing duties on Canadian softwood lumber.

The reviews determined a new countervailing duty (CVD) rate of 8.7 percent (down from the current 16.37 percent) and a new “all others” anti-dumping duty (AD) rate of 2.11 percent (down from the current 3.78 percent), for a total of 10.81 percent.

Under the U.S. duty assessment system, CVD and AD cash deposits for shipments made during previous years are assessed and finalized through annual administrative reviews. The new rates issued today are for shipments made during the following periods of review: CVD order—April 1, 2003, to March 31, 2004; AD order—May 1, 2003, to April 30, 2004.

Administrative reviews also establish the new cash deposit rates for future shipments of softwood lumber products to the United States, regardless of ongoing litigation. The new rates will take effect when the DOC issues instructions to U.S. Customs, which should happen within the next two weeks.

The reduction in these rates may bring some relief to Canadian softwood lumber exporters, and, as such, is a positive development. However, it is important to recall that as a result of the NAFTA Extraordinary Challenge Committee (ECC) decision in the threat of injury case, the United States is legally obligated to revoke the CVD and AD orders, refund all duties collected with interest, and terminate all ongoing administrative reviews.

Canada will be closely examining the administrative review results and consulting with the provinces and industry regarding next steps.

The results of the first administrative review, published in December 2004, dropped the rates to 20.15 percent from the original 27.22 percent. Canada challenged the CVD administrative review results under NAFTA. The Canadian softwood lumber industry is challenging the AD administrative review results before the U.S. Court of International Trade.

More information on softwood lumber issues is available at: http://www.softwoodlumber.gc.ca.

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Backgrounders are attached.

For further information, media representatives may contact:

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

Backgrounder

U.S. DEPARTMENT OF COMMERCE FINAL RESULTS OF

SECOND ADMINISTRATIVE REVIEWS

On December 6, 2005, the U.S. Department of Commerce (DOC) released the final results in the second annual administrative reviews of the anti-dumping (AD) and countervailing (CVD) duty orders on softwood lumber imports from Canada, determining a rate of 10.81 percent.

The DOC has determined a final, countrywide CVD rate of 8.7 percent for the period covered by the review. Lumber produced from logs harvested in the Maritime provinces is excluded from the CVD order.

The DOC also determined an “all others” AD rate of 2.11 percent. In addition, the DOC made company-specific findings for the following companies that were investigated during the course of the administrative review: Abitibi Consolidated Inc.: 2.52 percent, Buchanan Forest Products: 2.86 percent, Canfor Corporation: 1.36 percent, Tembec Inc.: 4.02 percent, Tolko Industries Ltd.: 3.09 percent, Weldwood of Canada Ltd.: 0.61 percent, West Fraser Timber Co. Ltd: 0.51 percent, and Weyerhaeuser Company: 4.43 percent.

Under the retrospective U.S. trade remedy system, the DOC conducts annual reviews of AD and CVD orders. These reviews assess the alleged level of dumping or subsidies during a previous period. The CVD review covered shipments made during the period of April 1, 2003, to March 31, 2004, while the AD review covered shipments made during the period of May 1, 2003 to April 30, 2004. The duty cash deposits for future shipments will be adjusted to the rates resulting from the administrative review once the determinations are published in the U.S. Federal Register.

The final results in these administrative reviews may be subject to binding dispute settlement under NAFTA Chapter 19 or before the U.S. Court of International Trade (CIT), and potentially at the World Trade Organization (WTO).

For exporters that requested an anti-dumping administrative review and for all exporters that paid countervailing duties, final duties for the corresponding period will be assessed at the new administrative review rates unless exporters request a NAFTA or CIT challenge, in which case assessment is suspended during litigation.

The first administrative reviews of the CVD and AD duty orders were initiated on July 1, 2003. The DOC found a countrywide CVD rate of 16.37 percent (slightly down from the original 18.79 percent) and a new “all others” anti-dumping duty rate of 3.78 percent (down from the original 8.43 percent), for a total of 20.15 percent.

On June 30, 2004, the DOC initiated the second administrative reviews. Preliminary results were published on June 7, 2005. The DOC found a countrywide CVD rate of 8.18 percent and an AD “all others” rate of 2.44 percent. In its June 2005 preliminary determination of the CVD order, the DOC used a “Maritimes stumpage benchmark,” as it did in the first administrative review, for determining whether provincial stumpage programs, except for in British Columbia, confer a subsidy on Canadian lumber producers. U.S. log prices were used as a benchmark to determine whether stumpage programs in British Columbia confer a subsidy.

Backgrounder

CHRONOLOGY OF KEY EVENTS

April 23, 2001: The United States Department of Commerce (DOC) initiated its countervailing and anti-dumping investigations into imports of softwood lumber from Canada.

April 2, 2002: The DOC published its final affirmative determinations of subsidy and dumping in the Federal Register.

May 2, 2002: The U.S. International Trade Commission (ITC) voted 4 to 0 that the U.S. softwood lumber industry was “threatened” with material injury by reason of imports of softwood lumber from Canada that were found by the DOC to be subsidized and sold in the U.S. at less than fair value.

May 22, 2002: The DOC published the countervailing duty order in the Federal Register. Companies were required to provide cash deposits to the U.S. Customs Service for countervailing and anti-dumping duties.

July 1, 2003: The DOC initiated the first administrative reviews of the anti-dumping and countervailing duty orders.

June 14, 2004: The DOC published the preliminary results of the first administrative reviews of the countervailing and anti-dumping orders.

June 30, 2004: The DOC initiated the second administrative reviews of the anti-dumping and countervailing duty orders.

December 14, 2004: The DOC published the final results of the first administrative reviews of the countervailing and anti-dumping orders.

June 7, 2005: The DOC published the preliminary results of the second administrative reviews of the countervailing and anti-dumping rates.

June 30, 2005: The DOC initiated the third administrative reviews of the anti-dumping and countervailing duty orders.

December 6, 2005: The DOC published the final results of the second administrative reviews of the countervailing and anti-dumping orders.

Other key dates

August 10, 2005: The NAFTA Extraordinary Challenge Committee in the threat of injury case issued its decision unanimously rejecting U.S. claims and affirming a 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.

November 22, 2005: The DOC issued its fifth remand determination in the NAFTA CVD case and found a new subsidy rate of 0.80 percent, or de minimis.