<html>
<head>
<meta name="generator" content="Corel WordPerfect 10">
<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-size: 14pt"><span style="font-weight: bold">Dec. 14, 2004 <i>(6:00 p.m.</i></span><i> <span style="font-weight: bold">EST)</span></i></span></p>
<p><span style="font-size: 14pt"><span style="font-weight: bold">No. 150</span></span></p>
<br>
<p style="text-align: center"><span style="font-weight: bold"><span style="font-size: 14pt">SOFTWOOD LUMBER: CANADA DENOUNCES U.S. DEPARTMENT OF
COMMERCE DETERMINATION</span></span></p>
<br>
<p>International Trade Minister Jim Peterson denounced a United States Department of
Commerce (DOC) decision to only slightly reduce softwood lumber countervailing duties
following its annual administrative reviews.</p>
<br>
<p>“I am extremely disappointed by this decision. The United States used a cross-border
benchmark for B.C. that has clearly been found illegal by the WTO and the NAFTA,”
said Minister Peterson. “We continue to maintain that Canadian softwood lumber is
neither subsidized nor dumped, and that it does not threaten to injure the U.S. industry.
The duties should be dropped.”</p>
<br>
<p>The reviews determined a new countervailing duty rate of 17.18 percent (slightly down
from the original 18.79 percent) and a new “all others” anti-dumping duty rate of 4.03
percent (down from the original 8.43 percent), for a total of 21.21 percent.</p>
<br>
<p>Under the U.S. duty assessment system, countervailing and anti-dumping cash
deposits for shipments made during previous years are assessed and finalized through
annual administrative reviews. The new rates issued today establish the assessment
rate for shipments made during the period under review. The period of review for the
countervailing duty order was May 22, 2002, to March 31, 2003. The period of review of
the anti-dumping duty order was May 22, 2002, to April 30, 2003.</p>
<br>
<p>Administrative review results also become the new cash deposit rates for future
shipments of softwood lumber products to the U.S., regardless of any ongoing
challenges. The new rates will take effect once the DOC issues instructions to U.S.
Customs, which should happen within the next two weeks.</p>
<br>
<p>Canada will be closely examining the administrative review results and consulting with
the provinces and industry regarding next steps.</p>
<br>
<p>More information on softwood lumber issues is available at
<a href="https://bac-lac.wayback.archive-it.org/web/20070220220444/http://www.softwoodlumber.gc.ca/"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.softwoodlumber.gc.ca</span></span></a><span style="color: #000000">.</span></p>
<br>
<p style="text-align: center"><span style="color: #000000">-30-</span></p>
<br>
<p><span style="color: #000000">Backgrounders are attached.</span></p>
<br>
<p><span style="color: #000000">For further information, media representatives may contact:</span></p>
<br>
<p><span style="color: #000000">Jacqueline LaRocque<br>
Director of Communications<br>
Office of the Minister of International Trade<br>
(613) 992-7332</span></p>
<br>
<p><span style="color: #000000">Media Relations Office<br>
Foreign Affairs Canada and International Trade Canada<br>
(613) 995-1874<br>
</span><a href="https://bac-lac.wayback.archive-it.org/web/20070220220444/http://www.international.gc.ca/"><span style="color: #0000ff"><span style="text-decoration: underline">http://www.international.gc.ca</span></span></a><span style="color: #000000"></span></p>
<br>
<br>
<p style="text-align: center"><span style="color: #000000"><span style="font-size: 14pt"><span style="font-weight: bold">Backgrounder</span></span></span></p>
<br>
<p style="text-align: center"><span style="color: #000000"><span style="font-size: 14pt"><span style="font-weight: bold">U.S. DEPARTMENT OF COMMERCE FINAL RESULTS OF<br>
FIRST ADMINISTRATIVE REVIEWS</span></span></span></p>
<br>
<p><span style="color: #000000">On December 14, 2004, the U.S. Department of Commerce (DOC) released the final
results in the first administrative reviews of the anti-dumping and countervailing duty
orders on softwood lumber from Canada for the period May 2002 to April 2003.</span></p>
<br>
<p><span style="color: #000000">The DOC has determined a final, countrywide countervailing duty rate of 17.18 percent
for the period covered by the review. Lumber produced from logs harvested in the
Maritime provinces is excluded from the countervailing duty order.</span></p>
<br>
<p><span style="color: #000000">The DOC also determined an “all others” anti-dumping duty rate of 4.03 percent. In
addition, the DOC made company-specific findings for the following companies that
were investigated during the course of the administrative review: Abitibi Consolidated:
3.12. percent, Buchanan Forest Products: 4.76 percent, Canfor Corporation: 1.83
percent, Tembec Inc.: 10.59 percent, Tolko Industries: 3.85 percent, West Fraser
Timber Company Ltd: 0.92 percent, and Weyerhaeuser Company: 8.70 percent.</span></p>
<br>
<p><span style="color: #000000">Under the retrospective U.S. trade remedy system, the DOC conducts annual reviews
of anti-dumping and countervailing duty orders. These reviews assess the actual level
of dumping or subsidies taking place in a previous period. The duty cash deposits for
future shipments will be adjusted to the rates resulting from the administrative review
once the determinations are published in the U.S. Federal Register.</span></p>
<br>
<p><span style="color: #000000">The final determinations in these administrative reviews are subject to binding dispute
settlement under NAFTA Chapter 19.</span></p>
<br>
<p><span style="color: #000000">The countervailing duty review covered shipments made during the period of
May 22, 2002, to March 31, 2003, while the anti-dumping duty review covered
shipments made during the period of May 22, 2002 to April 30, 2003.</span></p>
<br>
<p><span style="color: #000000">Unless NAFTA or domestic judicial review of the final determinations is requested,
importers of record will be assessed final duties at the rates resulting from the
administrative reviews for shipments made during the period of review.</span></p>
<br>
<p><span style="color: #000000">The first administrative reviews of the countervailing and anti-dumping duty orders were
initiated on July 1, 2003. Preliminary results were published on June 14, 2004. The
DOC found a countrywide countervailing duty rate of 9.24 percent, down from the 18.79
percent found in the May 2002 final subsidy determination from the original
investigation. It also found an anti-dumping duty “all others” rate of 3.98 percent, down
from the 8.43 percent found in the May 2002 final dumping determination from the
original investigation. In making its June 2004 preliminary determination of the
countervailing duty order, the DOC used a “Maritimes stumpage benchmark” for
determining whether provincial stumpage programs confer a subsidy to Canadian
lumber producers. The Government of Canada, together with the provinces, argued for
the use of in-province benchmarks instead, and, if such benchmarks are not used, for
appropriate revisions to the Maritimes benchmark to reflect market conditions of the
specific province being examined.</span></p>
<br>
<p><span style="color: #000000">In the December 14 final results, the DOC used a Maritimes benchmark for all
provinces except British Columbia, for which they used U.S. log prices as a benchmark.</span></p>
<br>
<br>
<p style="text-align: center"><span style="color: #000000"><span style="font-weight: bold"><span style="font-size: 14pt">Backgrounder</span></span></span></p>
<br>
<p style="text-align: center"><span style="color: #000000"><span style="font-weight: bold"><span style="font-size: 14pt">CHRONOLOGY OF KEY EVENTS</span></span></span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">April 23, 2001</span>: The United States Department of Commerce (DOC) initiated its
countervailing and anti-dumping investigations into imports of softwood lumber from
Canada.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">April 2, 2002</span>: The DOC published its final affirmative determinations of subsidy and
dumping in the Federal Register.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">May 2, 2002</span>: The U.S. International Trade Commission (ITC) voted 4 to 0 that the U.S.
softwood lumber industry was “threatened” with material injury by reason of imports of
softwood lumber from Canada that were found by the DOC to be subsidized and sold in
the U.S. at less than fair value.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">May 22, 2002</span>: The DOC published the countervailing duty order in the Federal
Register. Companies were required to provide cash deposits to the U.S. Customs
Service for countervailing and anti-dumping duties.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">July 1, 2003</span>: The DOC initiated the first administrative reviews of the anti-dumping and
countervailing duty orders.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">June 14, 2004</span>: The DOC published the preliminary results of the first administrative
review of the countervailing and anti-dumping rates.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">December 14, 2004</span>: The DOC published the final results of the first administrative
review of the countervailing and anti-dumping rates.</span></p>
<br>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">Other key dates</span></span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">September 10, 2004</span>: The ITC issued a remand determination in the NAFTA injury
panel proceeding, determining that lumber imports from Canada do not injure the U.S.
industry.</span></p>
<br>
<p><span style="color: #000000"><span style="font-weight: bold">October 12, 2004</span>: The NAFTA Secretariat issued the NAFTA injury panel’s order
affirming the ITC’s negative threat of injury determination.</span></p>
</body>
</html>
