U.S. Lowers Canadian Lumber Duties as Appeal of NAFTA Ruling - 12/20/2004 - International Real Estate

U.S. Lowers Canadian Lumber Duties as Appeal of NAFTA Ruling Moves Forward

The countervailing duty will be lowered marginally from 18.8% to 17.2%, while the anti-dumping duty rate will fall from 8.4% to 4.0%.

The new rates are expected to go into effect by the end of this year.

A preliminary U.S. decision in June would have slashed the rates by more than half — by 13.2% — for the softwood lumber products used for home building.

In response to the ruling, the Canadian government said that it would appeal the Commerce Department decision through the North American Free Trade Agreement (NAFTA) and World Trade Organization, where it has already won several legal victories in its bid to abolish the tariffs.

The most significant of those victories occurred in September, when a NAFTA panel unanimously ruled that there is no evidence that Canadian lumber shipments threaten the domestic industry, which is the legal justification for imposing the duties under both U.S. and international trade laws.

In a last-ditch attempt to keep the case alive and the duties in place, the Commerce Department, at the behest of the U.S. lumber lobby, filed an “extraordinary challenge” late last month to overturn the NAFTA ruling.

No nation filing an extraordinary challenge of a NAFTA ruling has ever won.

The levies will remain in place while the appeals process moves forward. A decision is expected in March.

If the U.S. loses the case, the duties will be rescinded.

For further information, e-mail Michael Strauss at NAHB or call him at 800-368-5242 x8252.