September 11, 2000 (5:15 p.m. EDT) No. 221

PETTIGREW ANNOUNCES ESTABLISHMENT OF WTO PANEL

International Trade Minister Pierre Pettigrew today announced that the World Trade Organization (WTO) has established, at Canada's request, a dispute settlement panel to rule whether the United States treatment of export restraints under its countervailing duty regime violates WTO obligations.

"I am pleased that the WTO has established this panel," said Minister Pettigrew. "The United States has investigated export restraints in previous cases involving Canadian products and we need to clarify the rules."

In the 1992 investigation of softwood lumber imports from Canada, the U.S. Department of Commerce found that log export restraints conferred a countervailable subsidy. This decision was later over-turned on review under the Canada-U.S. Free Trade Agreement. Last year, the United States again raised the issue of export restraints in a countervailing duty investigation of live cattle imports from Canada. No duties were imposed.

"The current Softwood Lumber Agreement with the United States is due to expire in March 2001," the Minister noted. "It is important to our industry and provinces that the U.S. application of these rules be consistent with its international obligations."

A countervailing duty is a special duty imposed to offset foreign subsidies on imported products that cause injury to the domestic industry.

Canada first requested the establishment of a panel at a special meeting of the WTO Dispute Settlement Body on August 4, 2000. The United States blocked establishment of the panel at that meeting. Dispute Settlement Body rules require the establishment of a panel at the second request for a panel, which occurred today. The panel will issue its decision in six to nine months.

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For further information, media representatives may contact:

Sylvie Bussières

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874