<html>
<head>
<meta name="generator" content="Corel WordPerfect 12">
<meta http-equiv="content-Type" content="text/html; charset=utf-8">
<style>
p
{
margin-top: 0px;
margin-bottom: 1px
}
body
{
font-family: "Arial", sans-serif;
font-size: 12pt;
font-weight: normal;
font-style: normal
}
</style>
</head>
<body>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-weight: bold"><span style="font-size: 14pt">June 9 <i>(6:00 p.m. EDT)</i><br>
No. 107</span></span></span></p>
<br>
<p style="text-align: center"><span style="font-family: 'Arial', sans-serif"><span style="font-weight: bold"><span style="font-size: 14pt">NAFTA PANEL FINDS U.S. ANTI-DUMPING DETERMINATION ILLEGAL</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">Minister of International Trade Jim Peterson welcomed today’s North American Free
Trade Agreement (NAFTA) panel decision regarding the West Fraser Mills Ltd. lumber
duties. The decision found that the United States Department of Commerce (DOC)
determination that it was not required to refund duties paid by West Fraser is
inconsistent with U.S. law. The NAFTA panel has ordered the DOC to issue a new
determination within 30 days.</span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">“The NAFTA panel decision supports what Canada has maintained throughout this
case—the U.S. has an obligation under its domestic law and NAFTA to refund duties,”
said Minister Peterson. “We want to see the U.S. do the right thing and refund these
duties to this Canadian company. We consider that this panel’s findings set out clearly
what must occur if there is no basis for anti-dumping or countervailing duty
orders—duties must be refunded.”</span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">On April 21, 2004, the DOC found that West Fraser’s dumping margin was <i>de minimis
</i>(i.e. less than two percent). As a result, the company should not have been liable for
anti-dumping duty deposits. However, the DOC indicated that it would not refund the
duties paid by the Canadian company. </span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">The panel also reconsidered its earlier decision regarding zeroing and found that
zeroing is inconsistent with U.S. law. The panel instructed the DOC to issue a new
determination without the use of zeroing, which should result in a lower dumping
margin. Canadian parties had requested that the panel review its earlier decision in
light of the August 11, 2004, Appellate Body ruling which found the U.S. practice of
zeroing to be inconsistent with its World Trade Organization (WTO) obligations. </span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">Zeroing is the practice of assigning a value of zero—rather than a negative value—to
the results of comparisons between domestic and export prices when establishing a
margin of dumping. This practice has the effect of making the dumping rate higher than
would otherwise be the case if zeroing were not used. </span></span></p>
<br>
<br>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt">For more information regarding Canada’s legal challenges against the United States at
the WTO and under NAFTA, please visit
</span></span><a href="https://bac-lac.wayback.archive-it.org/web/20070221010606/http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp"><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp</span></span></span></span></a><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">For more information regarding softwood lumber issues in general, please visit
</span></span></span><a href="https://bac-lac.wayback.archive-it.org/web/20070221010606/http://www.softwoodlumber.gc.ca/"><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.softwoodlumber.gc.ca</span></span></span></span></a><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">The NAFTA panel decision is available at </span></span></span><a href="https://bac-lac.wayback.archive-it.org/web/20070221010606/http://www.nafta-sec-alena.org/"><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.nafta-sec-alena.org</span></span></span></span></a><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">.</span></span></span></p>
<br>
<p style="text-align: center"><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">- 30 -</span></span></span></p>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">For further information, media representatives may contact:</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">Andrea Lanthier<br>
Press Secretary<br>
Office of the Minister of International Trade<br>
(613) 992-7332</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000">Media Relations Office<br>
International Trade Canada<br>
(613) 995-1874<br>
</span></span></span><a href="https://bac-lac.wayback.archive-it.org/web/20070221010606/http://www.international.gc.ca/"><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.international.gc.ca</span></span></span></span></a><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"></span></span></span></p>
<br>
<p style="text-align: center"><span style="font-family: 'Arial', sans-serif"><span style="color: #000000"><span style="font-weight: bold"><span style="font-size: 14pt">Backgrounder</span></span></span></span></p>
<br>
<p style="text-align: center"><span style="font-family: 'Arial', sans-serif"><span style="color: #000000"><span style="font-weight: bold"><span style="font-size: 14pt">CHRONOLOGY OF KEY EVENTS:</span><span style="font-size: 14pt"> CANADA’S NAFTA CHALLENGE OF
THE U.S. DEPARTMENT OF COMMERCE’S <br>
FINAL ANTI-DUMPING DUTY DETERMINATION</span></span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">April 2, 2001:</span> The United States Department of Commerce (DOC) initiated its
anti-dumping duty investigation of Canadian softwood lumber.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">October 30, 2001:</span> The DOC made a preliminary anti-dumping duty determination. Six
Canadian exporters were assigned individual margins of dumping, provisionally ranging
from 5.94 percent to 19.24 percent. The average dumping margin (12.58 percent) for
these six exporters was used to establish the rate for all other Canadian exporters of
softwood lumber.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">March 22, 2002:</span> The DOC announced a final affirmative determination of dumping
assigning the six Canadian exporters 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.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">April 2, 2002:</span> A binational panel was established under NAFTA Chapter 19 to review
whether the DOC’s final affirmative determination of dumping was contrary to U.S. law.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">July 17, 2003:</span> The panel issued its first report and instructed the DOC to correct its
original anti-dumping determination.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">October 15, 2003:</span> In response to the panel report, the DOC released a remand
determination establishing new dumping margins for the six Canadian exporters,
ranging from 2.22 percent to 12.36 percent. The new “all others” rate was reduced to
8.07 percent (not yet in force).</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">March 5, 2004:</span> The panel reviewed the DOC’s October 15 determination in its second
report and again instructed the DOC to issue a determination consistent with U.S. law.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">April 21, 2004:</span> The DOC issued its second remand determination which determined
that West Fraser Mills Ltd. was not dumping softwood lumber products into the U.S.
market. This effectively excludes West Fraser Mills Ltd. from the anti-dumping duty
order once the process is finalized but the DOC indicated that it would not refund duties
paid by the company. Because one of the companies has been excluded, DOC
recalculated an “all others” rate of 8.85 percent (not yet in force), using the dumping
margins of the five remaining respondents.</span></span></span></p>
<br>
<p><span style="font-family: 'Arial', sans-serif"><span style="font-size: 12pt"><span style="color: #000000"><span style="font-weight: bold">June 9, 2005:</span> The panel issued its third report and found that the DOC’s decision not
to refund duties paid by West Fraser Mills Ltd to be inconsistent with U.S. law. The
panel also ruled that the U.S. practice of zeroing is inconsistent with U.S. law. This
decision is consistent with an earlier WTO ruling on the matter.</span></span></span></p>
</body>
</html>
