USTR - WTO Panel Report Affirms US Determination Regarding Canadian Lumber
Office of the United States Trade Representative

 

WTO Panel Report Affirms US Determination Regarding Canadian Lumber
11/15/2005

WASHINGTON – A World Trade Organization (WTO) dispute settlement panel today rejected a Canadian challenge to a U.S. determination that Canadian lumber is threatening to injure the U.S. lumber industry. The panel found that the United States did not breach WTO rules when the U.S. International Trade Commission (ITC) determined that the U.S. lumber industry is threatened with material injury by reason of dumped and subsidized imports from Canada. United States Trade Representative Rob Portman said the report was an important affirmation that the United States applies its trade remedy laws in a WTO-consistent manner.

"Today’s findings confirm that U.S. duties on Canadian lumber to counter the threat of material injury to the U.S. industry were properly imposed under international trade rules," Portman said. "At the same time, we continue to believe that more litigation is not the right approach. Instead we believe that it is in the interest of both the United States and Canada to reach a permanent solution to the long-standing differences over softwood lumber. We hope that today’s report will encourage Canada to resume efforts to reach a mutually acceptable negotiated solution."

Today’s report resulted from a dispute initiated by Canada in February of this year. Canada alleged that the ITC’s determination did not comply with earlier WTO rulings on a previous ITC lumber determination. The report issued today rejects Canada’s challenge in its entirety.


Background:

This dispute concerns Canada’s challenge to a U.S. measure taken to comply with a prior WTO panel report. The original report found that certain aspects of the ITC’s threat of injury determination concerning softwood lumber imports from Canada were inconsistent with U.S. obligations under the WTO Antidumping and Subsidies Agreements. To implement the original panel’s recommendation that the United States come into compliance with its WTO obligations, the ITC undertook a four-month "section 129" proceeding in which it gathered additional evidence, held a public hearing, provided parties with three opportunities to submit written briefs and comments, and undertook additional analysis.

At the conclusion of its section 129 proceeding, the ITC issued a new determination on November 24, 2004, in which it found that the U.S. lumber industry is threatened with material injury by reason of imports of dumped and subsidized softwood lumber from Canada. On December 13, 2004, the antidumping and countervailing duty orders on softwood lumber from Canada were amended to reflect the issuance of the ITC’s determination. On December 20, 2004, notice of the amendment of the orders was published in the Federal Register.

The WTO challenge that led to today’s panel report was initiated by Canada on February 14, 2005, in a request pursuant to Article 21.5 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes. On February 25, 2005, the WTO Dispute Settlement Body referred the matter to the panel that heard the original dispute.

Canada’s principal argument was that the ITC’s threat of injury determination was not supported by evidence and analysis such that an objective and unbiased investigating authority could have made that determination. The panel rejected that argument in its entirety.

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