The Columbia Journal
P.O. Box 2633 MPO,
Vancouver, British Columbia,
Canada V6B 3W8
NAFTA Panel Rules Against US Injury Claims as Trade
CPP News Service
The US government’s claims that Canadian softwood lumber exports are
damaging wood production companies in the US has been rejected by a
trade panel under the North American Free Trade Agreement, but the
trade war may not be over, according to a woodworkers’ rep.
Kim Pollock, director of Policy and Land Use for the Industrial, Wood
and Allied Workers of Canada, said despite yesterday’s decision, the US
government still can appeal—and while it does so, the 27.2 per cent
countervailing duties on Canadian softwood products will likely remain
“Now that their injury case has been rejected, it kicks the legs out
from under the US government’s countervailing taxes,” he said. “But the
US still has avenues of appeal, and from our experience, they will use
every means to get what they want.”
After two years of appeals and negotiation, the panel issued what it
said is its final decision on the matter. It claims the US Commerce
Department, which had been representing US producers, has failed to
provide sufficient evidence to show the US lumber manufacturing firms
are being unfairly damaged by Canadian lumber exports.
This is the third time the panel has dealt with the US government’s
claim. In the first two hearings, the panel sent the case back to the
department for clarification and review. It now says the commerce
department has “provided no fresh evidence to support its claim.”
The US can now appeal under NAFTA’s special provisions clause. That
appeal will be heard sometime next year. It has until September 9 to
act and is expected to do so.
According to veteran trade researcher Ellen Gould, this will be the
final appeal for the US. If it loses, it will have to comply and remove
“They can use the judicial review of this ruling,” she said. “But once
that’s exhausted, then that’s it. If they lose, they either have to
comply or abrogate NAFTA altogether.”
However, she is urging Canadians not to celebrate prematurely, since
this final stage is usually where the US government, through power
politics and extensive legal challenges, usually gets its way.
“The US government has yet to lose a NAFTA trade dispute,” she said.
“Canada has lost quite a few over the years, and Mexico has lost the
most. But the US so far has yet to lose.”
She agrees that Canada’s position has been strengthened in future
negotiations now that the US can’t claim injury. But she warns that
last year’s unfavourable World Trade Organization ruling, which claimed
Canada unfairly subsidizes its lumber industry, could hinder any
“We lost at the WTO,” she said. “We were lucky the (NAFTA) panel ruled
there was no injury. If the economic situation had been any worse for
the lumber industry in the US, they might have been able to show there
was injury. It’s real crap shoot.”
Pollock says for now the next step is to resume negotiations, including
how Canadian forestry firms can recover the approximately $2.6 billion
they have paid in countervailing tariffs since the US government
imposed them in May of 2002.
While he hopes the companies can get this money back, he wants to see
at least some of it go into expanding and modernizing the wood products
industry, which has been suffering from declining capital investment
resulting from a wave of corporate concentration and mergers.
“I hope we can get this money directed at more investment in BC
industry, and not being used to just buy each other up,” he said.
“Corporate consolidation and down-sizing has been the trend. We need to
put some resources back into the industry so the people who work in it
can get some return.”