Canada claimed victory in its softwood-lumber dispute with the United States after a key NAFTA panel ruling Wednesday, and the nation demanded quick repayment of billions of dollars in penalties collected by its neighbor to the south.
The United States responded that it intends to keep imposing the tariffs and resume negotiations with Canada, basically disregarding the ruling Wednesday by an extraordinary challenge panel under the North American Free Trade Agreement. The panel dismissed U.S. claims that an earlier NAFTA ruling in favor of Canada violated trade rules.
The Bush administration imposed the tariffs in 2002 after accusing Canada of subsidizing its lumber industry. Most U.S. timber is harvested from private land at market prices, but in Canada, the government owns 90 percent of the timberland and charges fees for logging. The fee is based on the cost of maintaining and restoring the forest.
Since then, it has lost about $4.1 billion (U.S.) in punitive tariffs.
Canadian trade officials said they think the win could be the final blow to the U.S. timber industry's claims that Canadian producers are unfairly subsidized. But they acknowledge that the battle may not be over, as the United States still has options outside NAFTA, including a formal constitutional challenge or action under WTO regulations.
A statement from the office of the U.S. Trade Representative said that the White House was disappointed with the ruling but intends to keep in place its punitive tariffs on imports of Canadian softwood lumber.
"It will have no impact on the antidumping and countervailing duty orders," spokeswoman Neena Moorjani said in a statement.
The U.S. Commerce Department in December cut tariffs on Canadian softwood lumber from an average of 27.2 percent to 21.2 percent in an effort to appease the nation.
"We continue to have concerns about Canadian pricing and forestry practices," Moorjani said. "We believe that a negotiated solution is in the best interests of both the United States and Canada, and that litigation will not resolve the dispute."Associated Press via the Statemen Journal
