June 9, 1999 (12:40 p.m. EDT) No. 135

CANADA TAKES ACTION TO DEFEND SOFTWOOD LUMBER EXPORTS TO THE UNITED STATES

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.

"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.

The actions announced today, which enjoy the broad support of the industry, include:

• an immediate request for arbitration under the Softwood Lumber Agreement with the United States on rougher headed lumber;
• an immediate request for consultations under the Softwood Lumber Agreement with the United States on their reclassification of notched studs; and
• immediate referral of the tariff reclassification issues to the World Customs Organization Harmonized System Committee.

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.

Rougher headed lumber includes non-structural wooden articles used principally as fascia and trim board in building construction.

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.

- 30 -

For further information, media representatives may contact:

Leslie Swartman

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874