May 23, 2005 (6:40 p.m. EDT)
No. 94

NAFTA PANEL ONCE AGAIN DECLARES

U.S. SOFTWOOD LUMBER COUNTERVAILING DUTIES ILLEGAL

International Trade Minister Jim Peterson today welcomed a NAFTA Dispute Settlement Panel ruling that the United States Department of Commerce (DOC) countervailing duties on Canadian softwood lumber are contrary to U.S. law. The NAFTA Panel has directed the DOC to correct its determination.

“We are pleased with the NAFTA Panel’s decision, which found that the U.S. subsidy duties contravene U.S. law,” said Minister Peterson.

As a result of the three earlier NAFTA Panel decisions in this case, the DOC has reduced the original subsidy finding from 18.79 percent to 1.88 percent. However, Canadian exporters continue to pay an unjustified 16.37 percent subsidy rate imposed by the DOC following its December 2004 countervailing duty administrative review. Canada continues to argue that Canadian lumber production is not subsidized.

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.

The NAFTA panel decision is available at http://www.nafta-sec-alena.org.

- 30 -

For further information, media representatives may contact:

Andrea Lanthier

Press Secretary
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