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<title>CANADA TAKES ACTION TO DEFEND SOFTWOOD LUMBER EXPORTS TO THE UNITED STATES</title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>June 9, 1999 <em>(12:40 p.m. EDT)</em> No. 135</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>CANADA TAKES ACTION TO DEFEND SOFTWOOD LUMBER EXPORTS TO THE
UNITED STATES</strong></font></p>
<p><font face="Arial">International Trade Minister Sergio Marchi today announced that Canada is taking immediate action in response to
the U.S. government's unilateral move to reclassify two types of lumber known in the industry as rougher headed
lumber and notched studs, into a tariff category covered by the Canada-U.S. Softwood Lumber Agreement.</font></p>
<p><font face="Arial">"We are deeply disappointed by the U.S. decision to resume the reclassification of softwood lumber products. We
view this action as unfair, politically motivated harassment of Canadian exporters," said Minister Marchi. "Canada
will continue to vigorously oppose all U.S. attempts to unilaterally expand the scope of the Softwood Lumber
Agreement," he added.</font></p>
<p><font face="Arial">The actions announced today, which enjoy the broad support of the industry, include:</font></p>
<ul>
<li><font face="Arial">an immediate request for arbitration under the Softwood Lumber Agreement with the United States on rougher
headed lumber;</font></li>
<li><font face="Arial">an immediate request for consultations under the Softwood Lumber Agreement with the United States on their
reclassification of notched studs; and</font></li>
<li><font face="Arial">immediate referral of the tariff reclassification issues to the World Customs Organization Harmonized System
Committee. </font></li>
</ul>
<p><font face="Arial">The U.S. action comes in the wake of the May 10 ruling by the Harmonized System Committee, which supported
Canada's position on an earlier decision by the U.S. to reclassify drilled studs -- a two-by-four with holes for wiring
and pipes, a product very similar to notched studs. </font></p>
<p><font face="Arial">Rougher headed lumber includes non-structural wooden articles used principally as fascia and trim board in
building construction. </font></p>
<p><font face="Arial">Consultations are at the first step in the dispute settlement process. Consultations on rougher headed lumber took
place in April 1999, and therefore Canada is in a position to request arbitration under the Softwood Lumber
Agreement.</font></p>
<p align="CENTER"><font face="Arial"></font><font face="Arial">- 30 -</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Leslie Swartman</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><font face="Arial"></font></p>
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