by Mike Godfrey, Tax-news.com, Washington
25 April 2017
The Canadian Government has said it “disagrees strongly” with the US Department of Commerce’s decision to impose “unfair and punitive” duties on imports of Canadian softwood lumber.
The Department of Commerce has determined that Canadian softwood lumber imports are unfairly subsidized. In a preliminary determination, the Department said that countervailing duty rates will be imposed on the following major Canadian exporters: Cantor (20.26 percent), JD Irving (3.02 percent), Resolute (12.82 percent), Tolko (19.5 percent), and West Fraser (24.12 percent). A rate of 19.88 percent will apply for all other Canadian producers.
The preliminary determination was made in response to a petition filed in November 2016 by the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION). COALITION Legal Chair Cameron Krauss said the ruling “confirms that Canadian lumber mills are subsidized by their Government and benefit from timber pricing policies and other subsidies which harm US manufacturers and workers.”
US Commerce Secretary Wilbur Ross said it has “been a bad week for US-Canada trade relations,” and also accused Canada of seeking to “effectively cut off the last of dairy products being exported from the United States.” He also took aim at the North American Free Trade Agreement, stressing that “this is not our idea of a properly functioning Free Trade Agreement.”
The duties will total around USD1bn a year, Ross said.
The Canadian Government has criticized the move, and described the claims of unfair subsidies as “baseless and unfounded.”
According to a joint statement by Canada’s Natural Resources Minister, Jim Carr, and Foreign Affairs Minister Chrystia Freeland, “the Government of Canada will vigorously defend the interests of the Canadian softwood lumber industry, including through litigation. In ruling after ruling since 1983, international tribunals have disproved the unfounded subsidy and injury allegations from the US industry. We have prevailed in the past and we will do so again.”
Carr will re-convene the Federal-Provincial Task Force on Softwood Lumber this week to examine the additional measures available to the Government.
In the longer term, the ministers said that the Government will continue to press the Americans to “rescind this unfair and unwarranted trade action.” They added that Canada has put forward a number of proposals, which “ensure security of supply at fair prices to US consumers and US companies that rely on Canadian imports.”
The ministers said that they remain confident that a negotiated settlement can be reached.
The US Government’s decision was also criticized by the British Columbia Lumber Trade Council. The Council’s President, Susan Yurkovich, said the duties were unwarranted, and emphasized the industry’s willingness to work with Canada’s federal and provincial governments to support efforts to reach a new agreement.
British Columbia is the largest exporter of softwood lumber to the US, and the forest industry supports approximately 145,000 direct and indirect jobs in the province.
Published at Mon, 24 Apr 2017 19:00:00 -0500