Canada to challenge U.S. softwood lumber export duties through World Trade Organization

Click to play video: 'Trudeau says he continues to talk to Trump about ‘challenges’ around softwood lumber'
Trudeau says he continues to talk to Trump about ‘challenges’ around softwood lumber
Trudeau says he continues to talk to Trump about 'challenges' around softwood lumber – Jan 9, 2019

Canada said it will be considering “all of its legal options” to challenge Canadian softwood lumber export duties unveiled by the United States last month, the international minister of trade said Friday.

“These duties have caused unjustified harm for Canadian workers and businesses, and are hampering economic recovery on both sides of the border — especially when our people are being affected by the health and economic impacts of COVID-19,” Minister Mary Ng said in a statement.

“Canada will consider all of its legal options with respect to U.S. duties on softwood lumber, including the possibility of bringing this challenge to the World Trade Organization for review under its dispute settlement mechanism.”

Ng’s comments come in response to a new 7.42 per cent countervailing duty rate for most Canadian producers of softwood lumber that was established by the U.S. Department of Commerce on Nov. 24.

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This, and an additional 1.57 per cent anti-dumping rate combine to 8.99 per cent, although the Canadian government said “certain companies also received company-specific rates.”

Previously, Canadians exporting certain softwood lumber products to the U.S. were subject to a combined rate of 20.23 per cent. Last month, the federal government said it welcomed the reduction as a “step in the right direction,” but reaffirmed its position that “unfair” fees on Canada’s lumber industry must come to an end.

Click to play video: 'Trudeau promises to fight for Canadian lumber industry with U.S.'
Trudeau promises to fight for Canadian lumber industry with U.S.

In August, the World Trade Organization ruled against the U.S. over duties imposed in 2017 on the grounds that the American government had failed to prove 16 claims related to Canada’s lumber industry, resulting in unfair subsidy for Canadian producers.

Ng said “any duties” imposed on Canadian exports of softwood lumber to the U.S. were “unwarranted and unfair.”

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“Our government will continue to vigorously defend its forestry sector and the thousands of hard-working Canadians it employs,” she said.

The international trade minister’s comments are the latest development in a series of disputes between Canada and the U.S. over tariffs that have worsened over recent months.

Canadian officials have argued that U.S. duties drove up construction costs in both countries, inflicting further damage on a lumber industry already ravaged by the effects of climate change and the COVID-19 pandemic.

The U.S. Lumber Coalition has countered that even reducing the duty rate “understates true levels of subsidies and dumping,” by the Canadian lumber industry.

“The U.S. lumber industry will continue to push for the trade laws to be enforced to the fullest extent possible in the second administrative review to allow U.S. manufacturers and workers the chance to prosper,” coalition co-chair Jason Brochu said in a previous statement to Global News.

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