February 9, 2005 (6:10 p.m. EST)
No. 29
STATEMENT BY MINISTER PETERSON ON SOFTWOOD LUMBER
International Trade Minister Jim Peterson today issued the following statement:
"On February 14, Canada will challenge, before a World Trade Organization (WTO)
compliance panel, the U.S. implementation in the WTO threat-of-injury case regarding
softwood lumber imports from Canada. Canada will also file a request for authority to
retaliate against the U.S. in an amount exceeding C$4.1 billion. We expect the
retaliation authority request to be dealt with after the completion of the compliance
panel proceedings.
"The U.S. International Trade Commission's (ITC) threat-of-injury determination of
November 24, 2004, relies on the same faulty analysis that was found to be
WTO-inconsistent by the original WTO panel.
"In order to comply with the WTO ruling in this case, the ITC should have found no
threat of injury. The U.S. Department of Commerce should then have revoked the
anti-dumping and countervailing duty orders, and should have instructed U.S. Customs
to refund all of the softwood lumber cash deposits.
"The U.S. failure to comply with the WTO ruling has forced Canada to take the steps
necessary to protect its rights under the WTO."
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A backgrounder is attached.
For further information, media representatives may contact:
Jacqueline LaRocque
Director of Communications
Office of the Minister of International Trade
(613) 992-7332
Media Relations Office
International Trade Canada
(613) 995-1874
http://www.international.gc.ca
Backgrounder
SOFTWOOD LUMBER: WTO THREAT OF INJURY
CANADA TO CHALLENGE U.S. IMPLEMENTATION
On March 22, 2004, a World Trade Organization (WTO) panel found the original U.S.
International Trade Commission (ITC) determination that Canadian softwood lumber
imports threaten to injure the U.S. industry to be inconsistent with U.S. WTO
obligations.
Following the adoption of the panel report on April 26, 2004, Canada and the U.S.
agreed that the U.S. would have until January 26, 2005, to implement the WTO ruling.
To comply with the WTO ruling, the ITC was instructed by the U.S. Trade
Representative to issue a new determination as to whether Canadian softwood lumber
imports threaten to injure the U.S. industry.
On November 24, 2004, the ITC issued a new positive threat-of-injury determination to
implement the panel ruling. The U.S. also published amended anti-dumping and
countervailing duty orders to reflect the ITC's new determination. The November 24 ITC
threat-of-injury determination relies on the same faulty analysis that was found to be
WTO-inconsistent by the original WTO panel. Therefore, on February 14, 2005,
Canada will request that a WTO compliance panel be established to review U.S.
implementation. Under WTO rules, the compliance panel is to issue its report within
90 days of the request. However, it is not uncommon for the process to be subject to
delays.
While the issue of retaliation will only be considered after the results of the WTO
compliance panel and any subsequent appellate body review are released and adopted
(late 2005), at this stage in the WTO process and in order to preserve any future
retaliatory rights, Canada is also required to file, on February 14, a request for
authorization to retaliate against the U.S.
Canada will file a request for authority to retaliate in the amount of softwood lumber
cash deposits currently held with the U.S. Treasury (over C$4.1 billion), plus the
amount of cash deposits that the U.S. continues to collect illegally (over C$1 billion
annually), until such time as the U.S. complies with its WTO obligations.