Canada has announced $1.2 billion in aid for its softwood lumber industry, a move the United States called disappointing.

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Canada announces billion dollar aid package for softwood lumber industry

Canada has announced $1.2 billion in aid for its softwood lumber industry, a move the United States called disappointing. Jacques Saada, Canada's minister of regional economic development, said the aid should not harm Canada's case in a long-running trade dispute with the United States, which alleges the Canadian industry is already subsidized. "It's up to the U.S. to decide what they want to do with this; as far as we're concerned it is not (a subsidy)," Mr. Saada said Thursday. "If they take action on that we will defend it."

U.S. commerce Carlos Gutierrez and trade representative Rob Portman called it yet another subsidy. "The United States is very disappointed over Canada's announcement," Mr. Gutierrez said in a statement. On Tuesday, the U.S. commerce department said it will comply with a NAFTA panel's order to drastically cut U.S. duties on imports of Canadian softwood lumber, from an average about 16% to less than 1%. "Only days after we fully complied with a NAFTA decision, Canada responds by announcing huge new subsidies. Canada's actions illustrate what the United States has been saying all along: the Canadian industry is the beneficiary of subsidies that create an un-level playing field to the detriment of the U.S. industry," Mr. Portman said in a statement.

Canada's international trade minister, Jim Peterson, defended Canada's right to aid the industry. However, he suggested the aid could be reconsidered if Washington cancels the duties. "If the U.S. actually does the right thing -- that is, drop the duties and return our money -- the support package can be reviewed," Mr. Peterson said. The Bush administration imposed the tariffs in 2002, accusing Canada of subsidizing its lumber industry.