Split Trade Ruling on Wood

The World Trade Organization on Tuesday rejected almost all of Canada’s complaints against U.S. anti-dumping duties on its multibillion-dollar softwood business, but Washington did not escape all censure.

The ruling, the latest in a series in the long-running row, declared that the United States was within its rights to impose anti-dumping duties on imports of Canadian lumber.

But the WTO trade panel backed Canada on one important point, which will force Washington to review how it calculates the price of imports and hence the amount of duty it can apply.

The U.S. Trade Representative’s office in Washington called the WTO decision “an important victory for the United States.” Spokesman Richard Mills added, “The panel found that in virtually all respects, the United States action was consistent with our WTO obligations.”

Canadian Minister of International Trade Jim Peterson said of the WTO decision, “We are pleased that the WTO ruled in our favor on the key issue in the case” and he urged Washington to comply with that part of the ruling.

But lumber industries on both sides of the border are anxiously awaiting a separate decision -- by a North American Free Trade Agreement panel on April 30. That panel has been asked to decide whether the U.S. industry is threatened with injury as a result of Canadian wood exports.

A negative finding would bring an end to all U.S. duties.

The WTO decision, its final word on this particular aspect of the lumber dispute, covered anti-dumping duties imposed in 2001. They initially averaged 9.67%, but were subsequently cut to 8.38%.

However, when combined with separate countervailing duties on Canadian softwood, U.S. levies total more than 20% on annual shipments of about $6 billion of spruce, pine, fir and other wood used to build and remodel houses.

The two countries have been trying unsuccessfully for years to reach a deal that could replace the duties with a quota on Canadian wood for a limited time.

Washington says that the duties are needed to compensate for Canadian state aid. Canada denies there is any subsidy and asked the WTO to declare the U.S. duties a violation of international trade laws.

Though the WTO panel threw out most of Canada’s case, it found that Washington had erred by not including more highly priced Canadian lumber when deciding whether there was dumping -- the selling of goods below the price an exporter could get in its home market.