Published: November 25, 2005
United States Critical of New Canadian Lumber Subsidies
USTR, commerce secretary denounce Canada's $1.28 billion assistance package
The United States is dismayed at Canada's November 24 announcement of a new $1.28 billion assistance package for its lumber industry, according to U.S. Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez.
"The United States is very disappointed over Canada's announcement," Gutierrez said in a November 24 USTR press release.
The U.S. officials said that the new package reflects Canada's continued commitment to subsidizing its lumber industry and will complicate efforts to resolve a two-decade-old bilateral dispute over softwood lumber subsidies.
"Canada's actions illustrate what the United States has been saying all along: the Canadian industry is the beneficiary of subsidies that create an un-level playing field to the detriment of the U.S. industry," Portman said. "While we continue to believe that a long-term, durable settlement is the only way to resolve this dispute, Canada's actions complicate our attempts to reach a negotiated solution."
On November 15, a World Trade Organization dispute settlement panel rejected a Canadian challenge to a U.S. determination that the U.S. lumber industry is threatened by dumped and subsidized Canadian lumber imports. (See related article.)
Following is the text of the USTR press release:
OFFICE OF THE U.S. TRADE REPRESENTATIVE
Washington, D.C.
FOR IMMEDIATE RELEASE
November 24, 2005
United States Government Critical of New Canadian Government Lumber
Washington, DC - US Trade Representative Rob Portman and Secretary of Commerce Carlos Gutierrez responded to the announcement today by the Canadian Government of a $C 1.5 billion (approximately $US 1.28 billion) package of assistance for its forest products industry. The United States Government will consult with industry sources to gather information about the potential impact of the subsidies, which would be in addition to the subsidies to the Canadian softwood lumber industry the Commerce Department has previously identified.
"Today's announcement is disappointing. Only days after we fully complied with a NAFTA decision, Canada responds by announcing huge new subsidies. Canada's actions illustrate what the United States has been saying all along: the Canadian industry is the beneficiary of subsidies that create an un-level playing field to the detriment of the U.S. industry," said Ambassador Portman. "While we continue to believe that a long-term, durable settlement is the only way to resolve this dispute, Canada's actions complicate our attempts to reach a negotiated solution."
The new subsidy announcement follows a decision earlier this week by the Department of Commerce in which it found that the subsidy margin during the period of investigation used for the current countervailing duty order was de minimis. Those findings were made in response to a direction from a dispute settlement panel established under Chapter 19 of the North American Free Trade Agreement.
"The United States is very disappointed over Canada's announcement," said Secretary Gutierrez. "The contrast is startling -- at the same time a NAFTA panel has directed the Department of Commerce to find that Canadian subsidies are de minimis, Canada announces over a billion dollars in aid. This just goes to show that Canada will continue to funnel vast amounts of assistance to its industry. We will continue to insist that their subsidies be eliminated by all means at our disposal."
Background
The dispute over trade in softwood lumber stretches back more than two decades. Since 2002, the United States has imposed countervailing (CVD) and antidumping (AD) duties on imports of softwood lumber from Canada. The Department of Commerce imposed the AD/CVD orders after it found that the Federal and Provincial governments of Canada provided subsidies to Canadian softwood lumber producers and that Canadian producers were dumping softwood lumber in the U.S. market, and after the U.S. International Trade Commission found that dumped and subsidized imports from Canada threatened to injure the U.S. industry. The AD/CVD orders are the subject of approximately two dozen separate legal actions initiated by the Government of Canada, and Canadian provinces and industry. The WTO has confirmed the U.S. findings that imports from Canada were subsidized and dumped, and that the U.S. industry was threatened with injury. Other proceedings under the WTO, the North American Free Trade Agreement, and the U.S. Court of International Trade are underway.
See Also: WTO rules: Trade Laws not Breached by US in Canadian Dumping Issue
Source: U.S. Department of State
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