U.S. Department of Commerce ignores NAFTA once again

During the visit by U.S. secretary of state Condoleezza Rice to Canada past week, the secretary repeatedly stated that Canada needs to return to the negotiating table to resolve the softwood lumber dispute. The BC lumber trade council fully supports the position of the government of Canada that we will only return to the table once the U.S. gives Canada a sign of good faith. “We are not going to return to the negotiating table until we have reason to believe the U.S. will honour agreements we enter into with them,” said John Allan, president of the BC Lumber Trade Council. “In August Canada won a critical NAFTA decision, that should have ended the softwood lumber litigation and resulted in the elimination of the antidumping and countervailing duty orders and the refund of all $5 billion dollars in estimated duties the Canadian industry has paid over the past three years,” said Allan.

“Instead of complying with that decision, the U.S. chose to flout the rules of the NAFTA and maintain the duties as if the NAFTA ruling was irrelevant,” he added. “It is now imperative for the U.S. to provide Canada with a signal that it is prepared to honour its commitments and negotiate a fair agreement that will be respected by all parties,” said Mr. Allan. The U.S. department of commerce (DOC) is once again demonstrating its unwillingness to honour the rules of NAFTA. The decision on Friday by the DOC to disregard the legal requirement to issue its recalculation of the countervailing duty rate on softwood lumber is simply another delay tactic and a purposeful attempt by the U.S. to ignore the NAFTA panel.

“Faced with consistent losses in front of NAFTA panels, the DOC has decided that rather than comply with the legal orders, they will simply use delay tactics to needlessly continue the case,” said president of the BC lumber trade council. “While the U.S. continues to maintain they want to resolve the softwood lumber dispute, today’s action by the DOC says the opposite,” said Mr. Allan. The DOC said they had significant questions about the methodology applied by the NAFTA panel but we find it amazing they would wait until the eleventh hour to seek the clarification they say is needed,” he said.

Under the rules of the NAFTA, the department of commerce has a legal obligation to issue its remand determination on the countervailing duty today. In the October 5, 2005 decision, the NAFTA panel said, “the Investigating Authority is ordered to complete its remand determination by the firm date of October 28, 2005”. 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.