Canada and U.S. both satisfied with latest WTO ruling on softwood lumber

Apr 14, 2006. /Lesprom Network/. The World Trade Organization has partly backed Canada by striking down an earlier ruling that supported U.S. measures against softwood lumber imports, Canadian Press reported. But the WTO appellate body didn't make its own ruling on whether the U.S. penalties in the long-running trade dispute are even legal. Speaking to reporters after visiting soldiers at CFB Wainwright, Alta., prime minister Stephen Harper said he didn't view the softwood ruling as a defeat.

“The ruling was complex,'' Mr. Harper said. “I think we won more in that ruling than we lost.'' Mr. Harper noted that Canada's record has been mixed when it comes to WTO decisions, whereas the country has “a very, very strong record of success'' on NAFTA rulings "and those decisions are ultimately legally binding". So we continue to be encouraged that we have a strong legal position, and we're taking a strong position in any kind of future discussions with the United States,'' he said.

Canadian international trade minister David Emerson said the WTO ruling “reflects the position we have maintained all along. The United States can no longer claim that its measure is WTO-consistent,'' Mr. Emerson said. Canada asked the world body to find that the U.S. International Trade Commission made a mistake when it found that American producers were injured by softwood imports. The WTO found fault with a previous approach to evaluating the impact of imports, but it didn't rule on Canada's request that the U.S. determination was invalid. The earlier panel ``articulated and applied an improper standard of review in its assessment,'' Thursday's ruling said. The decision means Washington could still face $4.25 billion in penalties that Ottawa had said it would seek in the long-running lumber dispute.

The office of U.S. Trade Representative Rob Portman said Thursday's ruling supported Washington's stance that dumped and subsidized Canadian lumber threatens the American industry. “We continue to believe that it is in the interest of both the United States and Canada to reach a permanent solution to their long-standing differences over softwood lumber,'' said spokeswoman Neena Moorjani. U.S. lumber producers also applauded the ruling, saying it upholds their position that Canada is dumping subsidized softwood on the American market. “The U.S. government has repeatedly shown that Canadian lumber imports are unfairly traded and threaten U.S. sawmills and workers with injury,'' said Steve Swanson, chairman of the U.S. Coalition for Fair Lumber Imports. The coalition is upset that Canada is preparing an aid package, including loan guarantees, for its softwood producers. “Until Canada ends its unfair practices, the U.S. lumber industry will never stop insisting that action be taken under U.S. trade laws to fully offset the subsidies and dumping,'' Mr. Swanson said.

Canada insists its softwood isn't subsidized, saying several decisions favouring its position from a free trade panel trump rulings by the WTO. Canadian producers are demanding the U.S. return some CAD 5 billion in penalties that it has collected since 2002. They, too, claimed victory following the Thursday announcement. Officials on both sides of the border are investigating whether there's a chance of resuming formal negotiations to settle the dispute.