NEWS RELEASES

May 20, 2005 (11:40 a.m. EDT)
No. 91

CANADA REQUESTS WTO PANEL TO REVIEW U.S. IMPLEMENTATION IN SOFTWOOD LUMBER DUMPING CASE

International Trade Minister Jim Peterson announced today that Canada requested on May 19 the establishment of a World Trade Organization (WTO) compliance panel to review the U.S. implementation of a WTO decision in the softwood lumber dumping case. Canada finds the U.S. implementation measures to be inconsistent with the WTO decision.

To protect its retaliatory rights, the Government of Canada also sought authority to retaliate on C$400 million of U.S. imports. Retaliation will only be considered after the results of the compliance panel are known.

“Canada continues to pursue the actions necessary to defending its interests in the softwood lumber dispute with the U.S.,” said International Trade Minister Jim Peterson. “Once again, we are taking the necessary legal action to ensure that the United States lives up to its WTO obligations.”

On August 11, 2004, the WTO Appellate Body found the U.S. practice of zeroing in the lumber investigation to be WTO-inconsistent and recommended that the U.S. bring its measures into conformity with its WTO obligations. Zeroing is the practice of assigning a value of zero to goods for which the export price exceeds the home market price. Zeroing prevents the negative margin for one category of goods from offsetting a margin of dumping for another category of goods, which inflates the overall dumping margin.

In response to this WTO ruling, the U.S. Department of Commerce (DOC) modified its original calculations and issued on April 19, 2005, a revised dumping determination which uses zeroing in a different calculation methodology. The U.S. DOC’s new determination established a dumping rate of 11.54 percent, which represents an increase from the original rate of 8.43 percent. In Canada’s view, the new U.S. determination remains WTO-inconsistent.

For more information regarding Canada’s legal challenges against the United States at the WTO and under NAFTA, visit http://www.softwoodlumber.gc.ca.

- 30 -

A backgrounder providing a chronology of events is attached.

For further information, media representatives may contact:

Andrea Lanthier
Press Secretary
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

SOFTWOOD LUMBER ANTI-DUMPING LITIGATION

CHRONOLOGY OF KEY EVENTS

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

October 30, 2001: The U.S. DOC made a preliminary determination on dumping duties. Six Canadian exporters (respondents) were provisionally assigned individual dumping margins, ranging from 5.94 percent to 19.24 percent. The average dumping margin (12.58 percent) for these six respondents was used to establish the rate for all other Canadian exporters of softwood lumber.

March 22, 2002: The U.S. DOC announced a final affirmative determination of dumping. The six Canadian respondents were assigned individual dumping margins ranging from 2.18 percent to 12.44 percent. An “all others” dumping margin of 8.43 percent was applied to all other Canadian exporters of softwood lumber.

January 8, 2003: At Canada’s request, the WTO established a panel to resolve the dispute.

April 13, 2004: The WTO panel issued its final report.

May 13, 2004: The U.S. appealed the WTO panel’s findings with respect to zeroing.

May 28, 2004: Canada cross-appealed the WTO panel’s findings with respect to two company-specific issues.

August 11, 2004: The WTO Appellate Body issued its report upholding the finding of the WTO softwood lumber anti-dumping panel that the U.S. practice of zeroing is inconsistent with the Anti-dumping Agreement (ADA). On August 31, the Dispute Settlement Body adopted the reports of the panel and the Apellate Body, and recommended that the U.S. bring its measure into conformity with the ADA.

April 19, 2005: The United States issued the final results of its revised dumping determination and established a new dumping rate of 11.54 percent.

May 19, 2005: Canada requested the establishment of a WTO compliance panel to review U.S. implementation, and also requested authority to retaliate against the United States.