NAFTA Panel decisively supports Canada in lumber dispute

On June, 9 the North American Free Trade Agreement (NAFTA) Panel on anti-dumping released its second remand determination and unanimously handed Canada a clear and decisive victory in the Canada-U.S. softwood lumber dispute. In directing the U.S. Department of Commerce (DOC) that West Fraser Mills Ltd. (West Fraser) should be excluded from the anti-dumping order because of its de minimis or negligible dumping margin, the Panel made clear that West Fraser is entitled to a full refund of its cash deposits.

The decision by the NAFTA Panel fully vindicates the BC Lumber Trade Council’s position that the United States must refund all cash deposits once the orders in place against Canadian lumber producers are lifted. This is the first time a reviewing court or bi-national panel has weighed in on the duty refund issue and the decision could not have been clearer. The DOC has no basis under U.S. law to retain duties based upon an invalid order. Today, the decision applies to West Fraser. Once all the orders are revoked, which is now just a matter of time, the Panel’s reasoning will have lasting effect for all Canadian producers and ensure a just and full refund of anti-dumping and countervailing duty cash deposits. Also as part of today’s decision, the NAFTA Panel ordered the DOC to eliminate the use of “zeroing,” a practice that has the effect of driving up the anti-dumping rates.

This follows on the heels of a recent WTO Appellate Body decision that declared zeroing illegal and the U.S. decision to comply with the ruling. The BC Lumber Trade Council is the voice for companies in British Columbia representing the vast majority of BC lumber production. Its member companies account for about half of Canadian lumber production and half of Canadian lumber exports to the United States.