U.S. Says WTO Ruling Misfires
U.S. Trade Representative Robert Lighthizer says a World Trade Organization (WTO) panel report applies an “erroneous Appellate Body interpretation” and would shield Canada’s massive lumber subsidies from U.S. action imposing countervailing duties to support the U.S. softwood lumber industry and its workers.
“This flawed report confirms what the United States has been saying for years: The WTO dispute settlement system is being used to shield non-market practices and harm U.S. interests,” Lighthizer says. “The panel’s findings would prevent the United States from taking legitimate action in response to Canada’s pervasive subsidies for its softwood lumber industry.”
The U.S. is weighing its options in response to the WTO ruling.
The U.S. has expressed concerns about unfairly dumped and subsidized imports of softwood lumber products from Canada for nearly 40 years, and there is a long history of litigation over the issue at the WTO and in domestic courts. In 2017, the U.S. Dept. of Commerce and the U.S. International Trade Commission (USITC) found, for the third time in three decades, that the Canadian federal and provincial governments are subsidizing Canadian softwood lumber producers mostly through inaccurately determined and depressed stumpage costs, allowing Canadian producers to sell subsidized softwood lumber in the U.S. market and causing material injury to U.S. softwood lumber producers.
However, a WTO panel said the U.S. Dept. of Commerce had repeatedly acted inconsistently with the Agreement on Subsidies and Countervailing Measures (SCM) and recommended that the U.S. come into conformity with its obligations under SCM.
WTO concluded that the U.S. DOC was flawed multiple times by rejecting proposed private stumpage and log prices in Ontario as a valid stumpage benchmark; by rejecting proposed BCTS auction prices in British Columbia as a valid stumpage benchmark; by rejecting proposed auction stumpage prices in Québec as a valid stumpage benchmark; by rejecting proposed TDA log prices in Alberta as a valid stumpage benchmark; by erroneously finding that the Nova Scotia benchmark price reasonably reflected the prevailing market conditions in Alberta, Ontario and Québec; by not having proper basis to conclude that stand-as-a-whole pricing was not a prevailing market condition in British Columbia; and numerous other calculations by U.S. DOC that WTO said were inconsistent.
British Columbia Lumber Trade Council (BCLTC) applauded the WTO ruling as vindication of Canada in its challenge to the U.S. DOC’s 2017 subsidy determination.
“For more than three years our industry has paid billions of dollars in countervailing duties that today’s decision confirmed should never have been paid in the first place,” says Susan Yurkovich, President and CEO of BCLTC.
She says the WTO ruling is a scathing indictment of the U.S. Dept. of Commerce’s subsidy findings and the biased process it followed in reaching them.
The U.S. Lumber Coalition stated the WTO panel report represents the latest example of judicial overreach within the WTO seeking to undermine the U.S. trade laws, which makes it harder for U.S. producers to address unfair trade. “Canada’s unfair trade practices in softwood lumber are well documented, and the harm these practices cause to the U.S. forestry industry and workers is undisputed,” says U.S. Lumber Coalition Executive Director Zoltan van Heyningen. “The WTO panel with this report, like other WTO Appellate Body and panel reports, has added to U.S. obligations and diminished U.S. rights, addressing issues it has no authority to address, taking actions it has no authority to take, and interpreting WTO agreements in ways not envisioned by the WTO members who entered into those agreements.”
“While this decision is not binding upon the United States, and thus has no immediate effect on the ongoing Commerce Department proceedings, these deeply flawed WTO panel reports undermine the credibility of the entire WTO system and are harmful to U.S. workers and their communities who depend on the full and effective enforcement of the U.S. trade laws,” adds U.S. Lumber Coalition Co-Chair Jason Brochu. “The U.S. government must reject this blatant attempt by a WTO panel to diminish U.S. rights and the panel’s attempt to deviate and expand from original WTO obligations.”
This past May, a NAFTA panel unanimously affirmed a U.S. International Trade Commission (ITC) finding of harm to U.S. lumber producers caused by unfairly traded Canadian softwood imports.
In November 2016, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION) petitioned the U.S. Dept. of Commerce and the U.S. International Trade Commission to restore fair trade in softwood lumber between Canada and the U.S.
In November 2017, the U.S. Dept. of Commerce determined that Canada subsidizes softwood lumber products and that exporters from Canada have sold softwood lumber in the U.S. at less than fair value, distorting the U.S. softwood lumber market. U.S. DOC promptly placed subsidy and dumping duty rates of varying percentages on several Canadian lumber producers. In December 2017, the U.S. ITC agreed that the U.S. lumber industry is materially injured by the subsidies.
Latest News
Florida Land Is Cleared, Sold To Klausner Group
The Suwannee County Board of County Commissioners voted to deed a 155 acre property at Live Oak, Fla. for $1, with stipulations, to the Austrian company, Klausner, which plans to build a large southern pine…
Pedal To The Metal
Story by Dan Shell, Managing Editor Easing into the second half of 2013, lumber markets reflect a housing industry giving off very mixed signals. Lumber producers have enjoyed a surge in prices beginning in fall…
Hawaii Lumber Industry Sees Strong Growth Ahead
Strong growth in the Hawaii lumber industry is predicted as construction activity is picking up locally and across the nation, said Ken Laughlin, president of the Hawaii Lumber Products Association. “The lumber industry is about…
B.C. Sawmill Study Makes Surprise Finding On Using Moisture To Prevent Explosions
The smallest-sized wet wood dust is just as explosive as dry wood dust from B.C. sawmills, according to a report prepared by FPInnovations for the provincial sawmill sector. The surprise finding — which raises questions…
Wood Science 101: Where Does Lumber Come From?
One of the more interesting phenomena of today’s world is the insulation we have from the source of our sustenance, or raw materials. Many modern folk would have a hard time explaining where the natural…
U.S. Homebuilders Face High Lumber Prices
Total housing starts rose 35% year-over-year in the first quarter of this year, according to data from Deloitte. Single-family home construction contributed 500,000 jobs to the economy year-over-year in July, implying a thriving builder market.…
J.D. Irving Sawmills Division Invests To Open Maine Sawmill, Creating 60 Jobs
J.D. Irving, Limited Sawmills Division announced today that it will invest $30 million in a new state-of-the-art softwood sawmill at Ashland (Nashville Plantation), Maine. During the construction phase, the new facility will employ up to…
Find Us On Social
Newsletter
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
Subscribe/Renew
Timber Processing is delivered 10 times per year to subscribers who represent sawmill ownership, management and supervisory personnel and corporate executives. Subscriptions are FREE to qualified individuals.
Advertise
Complete the online form so we can direct you to the appropriate Sales Representative.