OTTAWA (Web posted September
27, 2002 @ 4:45 p.m.) The World Trade Organization today upheld
a report that ruled the United States was wrong in the way it
calculated duties on Canadian softwood lumber.
The preliminary report,
released in July, had both sides claiming victory in the
dispute. The WTO panel ruled the U.S. Commerce Department was
not justified in calculating a 27 per cent duty because it
compared the prices American mills pay for wood with prices paid
by Canadian companies.
At the same time the panel
did confirm that Canada has made contributions through to timber
sold, which helps support the American claim that the lumber is
subsidized.
"Although we do not
agree with all of the panel's conclusions, its reasoning on the
most important issue of natural resource subsidies is a clear
victory for the United States," said U.S. Trade representative
Robert B. Zoellick said in a press release. "Canada has
long argued that its natural resource subsidies do not fall
within the disciplines of the WTO and therefore cannot be
subject to countervailing duties under any circumstances. The
WTO has conclusively rejected the Canadian argument."
The political draw means the
softwood lumber dispute go on for years before it's finally
resolved. The next step will be to form a new WTO panel which
will come down to a final determination, which could come down
with an interim report in March 2003.
But both sides can appeal
today's report, which could push a resolution back even further.
The Commerce department would not comment on whether the United
States plans to appeal the report.
The two countries are
currently not negotiating to settle outside of the WTO. Western
provinces and Quebec and Ontario have been the most affected by
the duties, which have led to mill closures and layoffs.
The Commerce department has
agreed to conduct expedited company reviews, which will look at
whether certain remanufacturing companies and mills have
received any benefit from any government contributions.
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