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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>April 29, 2004 <em>(2:00 p.m. EDT)</em> No. 64</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>SOFTWOOD LUMBER: MINISTER PETERSON WELCOMES </strong></font></p> <p align="CENTER"><font face="Arial" size="+1"><strong>SECOND NAFTA RULING ON THREAT OF INJURY </strong></font></p>
<p><font face="Arial"></font><font face="Arial">International Trade Minister Jim Peterson today welcomed a North American Free Trade Agreement (NAFTA) panel report that found, for the second time, that the U.S. International Trade Commission (ITC) threat of injury determination was fundamentally flawed and inconsistent with U.S. law. </font></p>
<p><font face="Arial">"This supports what Canada has been saying all along: Canadian softwood lumber exports do not threaten to injure U.S. producers," said Minister Peterson. "Once again, the Panel has ruled in our favour. This is a significant victory for Canada."</font></p>
<p><font face="Arial">On May 22, 2002, the ITC determined that the U.S. softwood lumber industry was threatened with material injury by reason of alleged subsidized and dumped imports of softwood lumber from Canada. This threat of injury determination followed U.S. Department of Commerce subsidy and dumping determinations and resulted in the imposition of countervailing (18.79 percent) and anti-dumping duties (8.43 percent).</font></p>
<p><font face="Arial">On September 5, 2003, after reviewing the original threat of injury determination the NAFTA Panel ordered the ITC to issue a new determination consistent with U.S. law. On December 15, 2003, the ITC issued its new threat of injury determination, which reaffirmed its original determination. In today's report the Panel found that the ITC determination continues to be unsupported by the evidence on the record of the case. In Canada's view, the ITC should make a determination consistent with the Panel's instruction that would result in the United States revoking the countervailing and anti-dumping duty orders. </font></p>
<p><font face="Arial">Canada also challenged the threat of injury determination before the WTO. On April 26, 2004, the WTO Dispute Settlement Body (DSB) adopted the panel report that found the ITC's threat of injury determination to be inconsistent with WTO rules. In its March 22 report, the WTO Panel ruled that the ITC failed to properly demonstrate that the U.S. industry was threatened with material injury by reason of an imminent substantial increase in Canadian softwood lumber imports. The United States now has to indicate its intentions regarding the implementation of the DSB's recommendations.</font></p>
<p><font face="Arial">The Government of Canada will continue to work with the provinces and industry on the two-track strategy of litigation before NAFTA and WTO panels, and negotiations to find a lasting resolution to this dispute. </font></p>
<p><font face="Arial">For more information regarding Canada's legal challenges against the U.S. at the WTO and under NAFTA, please visit <a href="https://bac-lac.wayback.archive-it.org/web/20071122055035/http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp">http://www.dfait-maeci.gc.ca/eicb/softwood/legal_action-en.asp</a>.</font></p>
<p><font face="Arial">More information on softwood lumber issues in general is available at <a href="https://bac-lac.wayback.archive-it.org/web/20071122055035/http://www.softwoodlumber.gc.ca/">www.softwoodlumber.gc.ca</a>.</font></p>
<p><font face="Arial"><center>- 30 - </center> </font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Jacqueline LaRocque<br> Director of Communications<br> Office of the Minister of International Trade<br> (613) 992-7332</font></p>
<p><font face="Arial">Media Relations Office<br> Foreign Affairs Canada and International Trade Canada<br> (613) 995-1874<br> <a href="https://bac-lac.wayback.archive-it.org/web/20071122055035/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></font></p>
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