IN THE NEWS ~ U.S. slaps 10% duty on softwood lumber Shipments from four Canadian provinces will be affected

PUBLICATION: The Calgary Sun
DATE: 2009.04.08
SECTION: Business
PAGE: 43
DUPLICATES: Sault Star, Prince George Citizen, Kingston Whig-Standard, North Bay Nugget, The Thunder Bay Chronicle-Journal

U.S. slaps 10% duty on softwood lumber Shipments from four Canadian provinces will be affected

The U.S. is imposing a 10% duty on Canadian imports of softwood lumber from four provinces in a new test of the 2006 softwood lumber agreement.

The United States Trade Representative said it is owed US$54.8 million in penalties from Ontario, Quebec, Manitoba and Saskatchewan for failing to sufficiently lower exports of lumber as prices dropped. "We regret that Canada has chosen not to meet its commitments and has made this action necessary," the trade representative Ronald Kirk said in a statement.

He said the duties will be collected on shipments from the four provinces until the U.S. has collected the full amount.

In February, an international tribunal found Canada failed to properly calculate quotas on exports for the first six months of 2007, ordering the country to fix the breach by March 28.

But Trade Minister Stockwell Day said Canada has offered a payment of US$36.66 million "that we believe cures the breach." He said he plans to appeal the new tax.

The softwood lumber agreement signed in 2006 was supposed to bring long-standing peace to one of the most contentious areas in the trade relationship between the two countries, but has been ill-starred from the beginning.

NDP critic Peter Julian predicted the decision yesterday by the U.S. will be the first of several challenges -- two are already under way --that will go the U.S. way.

He said the anti-circumvention clause in the agreement gives the U.S. ammunition to challenge many Canadian practices, including any government initiative to help the beleaguered industry.

"There is a myriad of triggers (for punitive action) and there is no defence for the Canadian lumber industry," he said.

In a conference call from Vancouver, Day said he is looking for a quick resolution of the case by the tribunal hearing the appeal.

"Clearly, we don't agree with (the U.S. decision), but it is within their legal right to do it," he said. "This is why we hope for a speedy assessment by the tribunal -- so that we can get the matter behind us."

The U.S. Coalition for Fair Lumber Imports applauded the decision to impose the tax.

The U.S. has the right to impose the tax on shipments "since Canada failed to do so," said coalition chairman Steve Swanson.