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Canada Requesting $200 Million in Retaliatory Measures Against U.S. in Softwood Dispute |
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Written by Government of Canada
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Monday, 05 December 2005 |
Canada is pleased with today’s World Trade Organization (WTO) Appellate Body decision, which supports Canada’s position that U.S. procedures used to establish countervailing duties (CVD) on Canadian softwood lumber imports are inconsistent with WTO rules.
As a result of the Appellate Body decision, the case will now be sent to arbitration to determine the amount of retaliation Canada is entitled to in the event the United States does not bring itself into conformity with its WTO obligations. Canada is requesting authorization to retaliate against the United States in the amount of C$200 million. Arbitration will begin in early 2006, following WTO adoption of the Appellate Body report. The Government of Canada would seek the views of Canadians before any retaliatory measures were imposed.
Today’s decision, along with the August 1, 2005, WTO compliance panel decision, concluded that the U.S. Department of Commerce (DOC) failed to demonstrate that a subsidy existed in certain arm’s-length purchases of logs by Canadian softwood lumber producers. The Appellate Body also rejected U.S. arguments that the DOC’s annual administrative review of countervailing duties on softwood lumber falls outside the scope of the WTO compliance proceedings.
To bring itself into conformity with the Appellate Body decision, the United States must conduct a WTO-consistent analysis to demonstrate whether a subsidy exists in certain arm’s-length log purchases by Canadian softwood lumber producers, both in its original investigation and in its annual administrative review.
The Appellate Body decision does not affect the DOC’s November 22, 2005, de minimis (less than one percent) subsidy finding issued in the NAFTA proceedings. Once affirmed by the NAFTA CVD panel, the DOC’s finding that Canadian softwood lumber production is not subsidized should result in the revocation of the countervailing duty order and a refund of deposits paid.
Moreover, as a result of Canada’s Extraordinary Challenge Committee (ECC) win in the NAFTA threat of injury case, the United States has an obligation under its own law to revoke both countervailing and anti-dumping duty orders and to refund all deposits paid. Canada is challenging the U.S. failure to comply with the ECC decision in the injury case before the U.S. Court of International Trade.
The WTO and NAFTA processes are separate. The U.S. must comply with both sets of obligations. |
