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<title>PETTIGREW TO USE NAFTA TO CHALLENGE PENDINGU.S. LUMBER DECISION</title>
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<p><font face="Arial"></font><font face="Arial"></font><font face="Arial" size="+1"><strong>February 26, 2002 <em>(3:10 p.m. EST)</em> No. 19</strong></font><font face="Arial" size="+1"></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>PETTIGREW TO USE NAFTA TO CHALLENGE PENDING</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>U.S. LUMBER DECISION</strong></font></p>
<p><font face="Arial">International Trade Minister Pierre Pettigrew today announced that Canada will challenge the U.S. Department
of Commerce's final softwood lumber subsidy duty determination under the North American Free Trade
Agreement (NAFTA). The Government of Canada has filed a notice of intent requesting the establishment of a
binding panel under Chapter 19 of NAFTA to review the U.S. Department of Commerce's final lumber
countervailing duty determination. </font></p>
<p><font face="Arial">"A durable solution to the softwood lumber dispute is our preferred approach," said Minister Pettigrew.
"However, we are taking action today to keep all options open as the discussions proceed. By triggering the
panel selection process immediately, we are advancing the review of any U.S. findings of subsidy." </font></p>
<p><font face="Arial">A notice of intent to request a panel is the first step in NAFTA proceedings. Today's action complements other
Canadian challenges of U.S. law and practice at the World Trade Organization (WTO) in defence of Canada's
softwood lumber industry. This NAFTA challenge does not preclude future WTO actions. </font></p>
<p><font face="Arial">- 30 -</font></p>
<p><font face="Arial">A backgrounder is attached.</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Sébastien Théberge</font></p>
<p><font face="Arial">Office of the Minister for International Trade</font></p>
<p><font face="Arial">(613) 992-7332</font></p>
<p><font face="Arial">Media Relations Office</font></p>
<p><font face="Arial">Department of Foreign Affairs and International Trade</font></p>
<p><font face="Arial">(613) 995-1874</font></p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20070221020807/http://www.dfait-maeci.gc.ca/"><font face="Arial">http://www.dfait-maeci.gc.ca</a></font></p>
<p><font face="Arial" size="+1"><strong>Backgrounder</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>SOFTWOOD LUMBER: NOTICE OF INTENT TO REQUEST A NAFTA PANEL</strong></font></p>
<p><font face="Arial"></font><font face="Arial">On February 26, 2002, Canada filed a Notice of Intent to Request Panel Review of the final countervailing duty
determination by the U.S. Department of Commerce in the current investigation of softwood lumber, pursuant to
Article 1904:4 of the North American Free Trade Agreement (NAFTA). Under this provision, Canada has the
right to file this notice as a result of the provisional countervailing duties imposed on Canadian softwood lumber
in August and November 2001. This step will advance the selection process of a binational panel.</font></p>
<p><font face="Arial">Canada maintains that U.S. law and practice have not been properly applied by the U.S. Department of
Commerce in its preliminary determination on subsidy. In pursuing a NAFTA panel review, Canada is seeking a
binding panel ruling on whether the final determination of subsidy is in accordance with U.S. trade remedy law.
NAFTA requires a final panel ruling within 315 days of the request for panel review.</font></p>
<p><font face="Arial">This notice triggers the panel selection process. The panel will be composed of five expert members who have
relevant experience in international trade law. Each country, in consultation with the other, will appoint two
members and the fifth will be selected by agreement. Panel decisions are binding on the countries involved. </font></p>
<p><font face="Arial">Canada has already initiated a WTO challenge of U.S. law and practice relating to softwood lumber. A panel
has been established and is expected to report in approximately six months. </font></p>
<p><font face="Arial">Canada's WTO softwood lumber challenges include: the U.S. Department of Commerce Preliminary
Countervailing Duty Determination; the Affirmative Critical Circumstances Determination; Expedited Review of
Individual Companies, Section 129(c)(1) of the Uruguay Round Agreements Act; and Export Restraints. Last
year, a WTO panel ruled, in another Canadian challenge of U.S. law, that an export restraint is not a subsidy.</font></p>
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