The U.S. International Trade Commission said Tuesday it has again found that softwood lumber exports from this country pose a threat to the U.S. industry, allowing that country to continue collecting punitive 27-per-cent duties in the long-running trade dispute.
Tuesday's ruling from the quasi-judicial ITC came after a Sept. 5 finding by a North American Free Trade Agreement panel that found that the ITC did not prove that U.S. interest were threatened by Canadian imports. The ITC had 100 days to revisit its decision.
“The commission found on remand that an industry in the United States is threatened with material injury by reason of imports of softwood lumber from Canada and that the U.S. Department of Commerce determined are subsidized and sold in the United States at less than fair value,” the ITC said in Tuesday's statement.
The ball is now put back into the NAFTA panel's court, with it likely to rule next month on whether it accepts the commission's most recent volley.
The latest move comes against a backdrop of attempted – but ultimately troubled – efforts to resolve the dispute.
A proposed deal unveiled earlier this month would give Canadian lumber duty-free access to 31.5 per cent of the U.S. softwood market with stiff tariffs on shipments above that level. The quota would have to be split among provinces and that is proving to be a headache for Ottawa. Canada has yet to reply to the proposal.
However, the pact has met stiff opposition on some fronts in this country, with one of Canada's biggest softwood players calling it “disproportionately punishing.”
The U.S.-backed settlement announced over the weekend would put an end to crippling duties averaging 27 per cent imposed by Washington on U.S.-bound softwood lumber in May, 2002, but Canadian companies would get back only 52 per cent of the money, with the rest distributed among American companies.
Canada's new International Trade Minister Jim Peterson said Ottawa will consult the industry and the provinces before it acts, saying Canada may challenge the NAFTA panel's ruling.
“We regret that the ITC has come back with a determination that maintains its threat of injury finding,” Mr. Peterson said. “Canada does not agree with this determination.”
Canada's share of the U.S. softwood lumber market would be capped at 31.5 per cent, down from 34 per cent. Above that, a levy of $200 (U.S.) per thousand board feet would kick in.
Eastern Canadian producers fear the proposed quota cap on the amount of lumber than can be shipped to the U.S. will hurt disproportionately hurt them as opposed to Western companies.
The proposed deal would last five years but could be terminated by either side with 12 months notice. In addition, Canada would agree to drop its complaints at the NAFTA and the WTO.
Tuesday's decision was again criticized by U.S. consumers group American Consumers for Affordable Homes, which called the ITC's finding “wrong” and called on the NAFTA panel to reject the move.
“We believe that NAFTA again will reject the flawed ITC conclusion, allowing the duties to be removed and the cases terminated as early as March,” ACAH spokeswoman Susan Petniunas said.
“If NAFTA again rejects the ITC finding, the antidumping and countervailing duties of nearly 28 per cent would be terminated and the money collected over the past 18 months returned to Canada”
Tembec Inc. chief executive officer Frank Dottori, who co-chairs the Free Trade Lumber Council, was also critical of the latest ITC ruling, although he also said he wasn't surprised by the finding.
“This is a perfect example of why Canada must pursue the legal avenue to its conclusion in the softwood lumber dispute,” he said in a statement.
“The decision announced today is typical of U.S. agencies foot-dragging on trade issues.”
