WTO says U.S. now complies with lumber rules
GENEVA – The United States has made sufficient changes to import duties on Canadian lumber and is now in compliance with international rules, the World Trade Organization ruled Tuesday.
A WTO compliance panel found that the United States had made its legislation comply with a previous ruling, rejecting claims from Canada that its producers continued to suffer from unfair U.S. duties.
The decision means Washington will avoid $4.25 billion Canadian ($3.5 billion U.S.) in sanctions that Ottawa had said it would seek in the long-running lumber dispute. Canada will appeal the decision, Trade Minister Jim Peterson said.
“The United States has implemented the decision of the panel … to bring its measure into conformity with its obligations,” the ruling said.
In March 2004, the global trade body found that the U.S. International Trade Commission had failed to be “objective and unbiased” when it reported to the U.S. government on alleged “dumping” of Canadian lumber at below market price.
It said that while the United States had the right to impose duties on Canadian lumber, some breached international trade rules because the U.S. Commerce Department had miscalculated them. The WTO ordered the United States to comply with WTO rules.
U.S. diplomats said in February the United States had fallen into line due to new USITC rulings late last year that amended import duties. But Canadian diplomats contested this at the WTO, saying the country’s producers were still facing unfair duties worth $150 million Canadian ($125 million U.S.) a month.
“The USITC fully addressed the findings in the panel report,” the ruling said. “Canada’s assertions to the contrary simply are incorrect.”
Ottawa and Washington have a handful of complex disputes over imports of Canadian softwood lumber, which is used by house builders, and have turned frequently to the WTO in their trade battle.
In separate cases, North American Free Trade Agreement panels have twice found in favor of Canada. Ottawa says NAFTA trumps WTO and that Washington should dump the tariffs and pay up.
“The WTO panels findings do not change the fact that the NAFTA process – which is enforceable under U.S. domestic law – has already concluded that the U.S. was wrong to impose duties on Canadian softwood lumber in the first place,” Peterson said in a statement.