U.S. again arbitrarily inflates subsidy rates

Dec 15, 2004. /Lesprom Network/. The U.S. Department of Commerce (DOC) announced the final results of the administrative reviews to establish the new countervailing and anti-dumping cash deposit rates going forward for all Canadian softwood lumber exports to the U.S. The administrative reviews resulted in a combined cash deposit rate of 21.21% substantially up from the 13.22% preliminary finding established by the DOC in June 2004.

“The BC Lumber Trade Council is outraged that the DOC has nearly doubled the subsidy margin from the preliminary determination,” said John Allan, president of the BC Lumber Trade Council. “The DOC has clearly decided to disregard the law by using an illegal methodology based on U.S. log prices and find subsidy where none exists.” This is the fourth different benchmark DOC has used in this case. “It’s difficult to imagine a more arbitrary process than the one in which the DOC is constantly changing the rules of the game to reach predetermined results,” said Mr. Allan. “We are confident that this decision will be reversed on appeal just as the previous subsidy findings in this case have been overturned by a unanimous NAFTA Panel,” added Allan. The administrative reviews are based on softwood lumber shipments to the U.S. between May 22, 2002 and March 31, 2003.

The DOC assessed a country-wide countervailing rate of 17.18% and an “all other’s” anti-dumping rate of 4.03%. Canadian producers will have paid over $3.34 billion U.S. in cash deposits by the end of December 2004. A separate NAFTA panel has already concluded that this money was collected in violation of U.S. law because the International Trade Commission had no basis for finding injury to the U.S. industry. The Canadian industry expects that money to be refunded following the successful completion of the International Trade Commission NAFTA process next spring. The final administrative review results will establish new countervailing and anti-dumping cash deposit rates for future entries once the final results are published in the Federal Register, which is expected to happen within the next ten days. 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.