NAFTA rules against U.S. lumber subsidies

Posted: Thursday, September 02, 2004

WASHINGTON For the third time, a North American Free Trade Agreement panel has ruled that the United States failed to prove its softwood lumber industry is harmed by Canadian imports.

In the decision late Tuesday, the five-member NAFTA panel directed the U.S. International Trade Commission to rescind its justification for the average 27.2 percent tariffs on Canadian lumber since May 2002.

The panel said the ITC had presented no new evidence to support earlier rejected evidence that Canadian imports harmed U.S. producers. The commission ''is simply unwilling to accept this panel's review authority,'' the NAFTA panel said.

The National Association of Home Builders applauded the ruling, calling it a victory for American homebuyers squeezed by lumber prices nearing record levels.

The home builders group called on the Bush administration not to appeal the ruling.

Softwood lumber from pine, spruce and fir trees is used to build homes. In 2002, the United States imported about a third of its supply nearly $6 billion from Canada.

That year, the Bush administration slapped stiff duties on softwood imports from four Canadian provinces.

The Commerce Department in June proposed cutting the duties, which include anti-dumping and punitive tariffs, to 13.2 percent.

Christopher Padilla, a spokesperson for the U.S. Trade Representative, said the administration has concerns about the ruling and has not decided how to proceed.

''It's in the interest of both the United States and Canada to try to reach a permanent solution to the softwood lumber dispute,'' Padilla said.

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