August 11, 2004 (12:00 p.m. EDT) No. 90


WTO APPELLATE BODY RULES IN CANADA’S FAVOUR ON
SOFTWOOD ANTI-DUMPING DUTIES


Jim Peterson, Minister of International Trade, welcomed today’s World Trade Organization (WTO) Appellate Body decision that found the United States’ use of zeroing to be inconsistent with the WTO Anti-dumping Agreement. The Appellate Body also found in favour of Canada regarding Abitibi Consolidated Inc. The WTO report recommends that the U.S. bring its anti-dumping measures with respect to softwood lumber from Canada into conformity with its WTO obligations.


“We are pleased that the WTO Appellate Body affirmed that the U.S. practice of zeroing in this case breaches WTO anti-dumping rules,” said Minister Peterson. “We are also very pleased that the Appellate Body ruled in Canada’s favour on Abitibi. We urge the U.S. to comply with this ruling.”


Zeroing is the practice of assigning a margin of zero to goods for which the export price exceeds the home market price. This difference is also referred to as a “negative dumping margin.” Zeroing prevents the negative margin for one category of goods from offsetting a margin of dumping for another category of goods. This is an important issue because zeroing results in higher dumping rates.


Canada had asked the Appellate Body to reconsider the Panel’s findings with respect to the calculations of the dumping margins for Abitibi Consolidated Inc. and Tembec Inc. In today’s report, the Appellate Body reversed the Panel’s legal findings with respect to Abitibi and upheld the Panel’s findings regarding Tembec.


The Appellate Body’s report will be adopted by the WTO Dispute Settlement Body within 30 days. Once the Dispute Settlement Body has adopted the report, the U.S. will be required to bring its measures into conformity with its WTO obligations within a reasonable period of time.


Dumping is the sale of goods in a foreign market at prices below those charged for comparable sales in the home market or that are below the cost of producing the goods.


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


The WTO panel report is available at http://www.wto.org.


- 30 -

A backgrounder is attached.


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
Foreign Affairs Canada and International Trade Canada
(613) 995-1874
http://www.international.gc.ca



Backgrounder


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 DOC made a preliminary dumping duty determination. Six Canadian exporters (respondents) were assessed individual margins of dumping, provisionally ranging from 5.94 percent to 19.24 percent. The average margin of dumping (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 DOC announced a final affirmative determination of dumping. The six Canadian respondents were assessed individual margins of dumping ranging from 2.18 percent to 12.44 percent. An “all others” margin of dumping 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.


June 17-18, 2003: The Panel held its first hearing in this case.


July 29-30, 2003: The Panel held its second hearing in this case.


April 13, 2004: The Panel issued its final report to the parties.


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


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


June 22, 2004: The WTO Appellate Body held a hearing.


August 11, 2004: The WTO Appellate Body issued its report.