WASHINGTON – A World Trade Organization (WTO) dispute settlement panel today
rejected a Canadian challenge to a U.S. determination that Canadian lumber is
threatening to injure the U.S. lumber industry. The panel found that the United
States did not breach WTO rules when the U.S. International Trade Commission
(ITC) determined that the U.S. lumber industry is threatened with material
injury by reason of dumped and subsidized imports from Canada. United States
Trade Representative Rob Portman said the report was an important affirmation
that the United States applies its trade remedy laws in a WTO-consistent
"Today’s findings confirm that U.S. duties on Canadian lumber to counter the
threat of material injury to the U.S. industry were properly imposed under
international trade rules," Portman said. "At the same time, we continue to
believe that more litigation is not the right approach. Instead we believe that
it is in the interest of both the United States and Canada to reach a permanent
solution to the long-standing differences over softwood lumber. We hope that
today’s report will encourage Canada to resume efforts to reach a mutually
acceptable negotiated solution."
Today’s report resulted from a dispute initiated by Canada in February of
this year. Canada alleged that the ITC’s determination did not comply with
earlier WTO rulings on a previous ITC lumber determination. The report issued
today rejects Canada’s challenge in its entirety.
This dispute concerns Canada’s challenge to a U.S. measure taken to comply
with a prior WTO panel report. The original report found that certain aspects of
the ITC’s threat of injury determination concerning softwood lumber imports from
Canada were inconsistent with U.S. obligations under the WTO Antidumping and
Subsidies Agreements. To implement the original panel’s recommendation that the
United States come into compliance with its WTO obligations, the ITC undertook a
four-month "section 129" proceeding in which it gathered additional evidence,
held a public hearing, provided parties with three opportunities to submit
written briefs and comments, and undertook additional analysis.
At the conclusion of its section 129 proceeding, the ITC issued a new
determination on November 24, 2004, in which it found that the U.S. lumber
industry is threatened with material injury by reason of imports of dumped and
subsidized softwood lumber from Canada. On December 13, 2004, the antidumping
and countervailing duty orders on softwood lumber from Canada were amended to
reflect the issuance of the ITC’s determination. On December 20, 2004, notice of
the amendment of the orders was published in the Federal Register.
The WTO challenge that led to today’s panel report was initiated by Canada on
February 14, 2005, in a request pursuant to Article 21.5 of the WTO
Understanding on Rules and Procedures Governing the Settlement of Disputes. On
February 25, 2005, the WTO Dispute Settlement Body referred the matter to the
panel that heard the original dispute.
Canada’s principal argument was that the ITC’s threat of injury determination
was not supported by evidence and analysis such that an objective and unbiased
investigating authority could have made that determination. The panel rejected
that argument in its entirety.