USTR - Schwab Announces Plans for Disposition of Funds for Meritorious Initiatives under the United States-Canada Softwood Lumber Agreement
                 
The Office of the United States Trade Representative

Schwab Announces Plans for Disposition of Funds for Meritorious Initiatives under the United States-Canada Softwood Lumber Agreement
09/12/2006


WASHINGTON- U. S. Trade Representative Susan C. Schwab today announced plans for the disbursement of funds to advance meritorious initiatives in the United States in accordance with the terms of the softwood lumber agreement (SLA) to be concluded between the United States and Canada. The money allocated under the Agreement for meritorious initiatives will be disbursed to private non-profit organizations whose missions reflect the objectives of the Agreement.

The SLA requires that $450 million of the approximately $5.3 billion in deposits that have been collected under the antidumping (AD) and countervailing duty (CVD) orders on Canadian softwood lumber be used to advance three types of meritorious initiatives in the United States: (1) assistance for timber reliant communities; (2) low income housing and disaster relief; and (3) promotion of sustainable forest management practices.

"I look forward to working with the Canadian Government on which organizations will receive funds," said Ambassador Schwab. "These funds will support worthy causes while at the same time reinforcing the underlying purpose of the settlement agreement, which is to create a stronger, more vibrant North American lumber industry."

The private non-profit organizations will be selected in consultation with the Canadian Government by the time the Agreement enters into force. By turning the funds over to private non-profit organizations the U.S. government will have no role in the allocation of the funds by the organizations. The funds are not expected to be disbursed before December 1, 2006.

BACKGROUND

Since the Department of Commerce issued the AD/CVD orders on Canadian softwood lumber in 2002, approximately $5.3 billion in cash deposits have been collected. The deposits have been held in clearing accounts by U.S. Customs and Border Protection, separate from the general treasury, because the AD/CVD orders and the eventual disposition of the money remains subject to litigation before U.S. courts and NAFTA tribunals.

Under the terms of the SLA, all litigation arising out of the AD/CVD orders will be terminated or withdrawn, and the AD/CVD tariffs will be replaced with a combination of export taxes and volume restraints. In addition, the money that has been collected under the AD/CVD orders will be distributed as follows:

  • Approximately $4.3 billion will be returned to the importers of record;
  • $500 million will be disbursed to the petitioners in the AD/CVD case, the Coalition for Fair Lumber Imports;
  • $50 million will be disbursed to a binational industry council; and
  • $450 million will be used for meritorious initiatives.