The Associated Press | By MATTHEW DALY | May 27, 2003
The World Trade Organization has ruled that the United States erred in approving stiff tariffs on imports of Canadian softwood lumber used to build homes, Canada's trade minister said Tuesday.
International Trade Minister Pierre Pettigrew said the interim ruling by a panel of the world trade body supports Canada's claim that its logging practices - which include charging fees for use of government-owned forests - are not subsidies.
"Yet again, it appears that the U.S. is being told that its attempts to prove that our softwood industry is subsidized are flawed," Pettigrew said in a statement.
But a U.S. trade official disputed Pettigrew's account.
He called the confidential ruling mixed and said the U.S. prevailed in at least one crucial respect: The WTO ruled that Canada's system of providing lumber producers with timber from public lands is a financial contribution and, therefore, subject to duties such as those imposed by the United States.
The official called that aspect of the ruling "a victory for both the U.S. lumber industry and the environment."
The United States contends that Canada's fees are artificially low and amount to subsidies that allow Canadian mills to sell wood below market value. Last year, the Bush administration slapped antidumping duties averaging 27 percent on softwood imports from four provinces, contending that Canadian lumber imports threatened the U.S. industry.
Canada complained to the world trade body that U.S. tariffs have cost Canadian lumber companies hundreds of millions of dollars and wiped out thousands of jobs.
Most U.S. timber is harvested from private land at market prices, while in Canada, the government owns 90 percent of timberlands and charges fees, called stumpage, for logging. The fee is based on the cost of maintaining and restoring the forest.
The case decided Tuesday is largely the same set of competing arguments that yielded a similar decision last July.
The WTO panel is expected to issue a final report on the U.S. subsidy determination in July.
Canada remains open to negotiations with the U.S. on a long-term settlement of the dispute, Pettigrew said.The Associated Press:
