Canada to continue softwood lumber policy: Trudeau

  • World
  • Thursday, 03 Sep 2020

VANCOUVER, Sept. 2 (Xinhua) -- Canadian Prime Minister Justin Trudeau pledged on Wednesday to continue the fight against the United States' imposing countervailing duties on Canadian softwood lumber exports.

In an interview on Vancouver-based RED FM, Trudeau hailed the World Trade Organization (WTO) for ruling last week in Canada's favor and spoke highly of his government's investments on behalf of forestry operators in British Columbia province.

He said that the U.S. government is wrong for persistently trying to punish a Canadian industry. "Canada is doing the right things and the United States is wrong."

Trudeau said Canada knows that a big part of restarting its economies and building back better is going to involve construction, which is going to require forestry products.

"The Americans continue to think that having people pay higher prices than necessary for their lumber is a good thing for the economy. Of course, they're wrong," he said.

The WTO dispute-resolution panel declared that the U.S. Department of Commerce and the U.S. International Trade Commission were wrong in 2017 when they imposed countervailing duties on Canadian softwood lumber exports, having concluded that Canada's regulated forestry industry amounts to an unfair advantage for Canadian producers.

The WTO panel agreed with Canada's argument that the U.S. Commerce Department made a number of errors in determining the benchmark Canadian timber prices it used to determine whether producers north of the border were paying adequate stumpage fees to the provinces in Canada.

The 2017 flashpoint over countervailing duties was just the latest flare-up in a trade dispute that has raged for nearly 40 years.

U.S. producers have long argued that Canada's system of provincially regulating stumpage fees, which are paid to the provincial governments' exchange for the right to harvest timber, unfairly subsidizes an industry that is privately owned and operated in the United States, with pricing set by the competitive marketplace. As a result, the United States argues, imports of Canadian lumber should be subject to countervailing duties.

The WTO ruling came after a U.S. decision last month to restore 10 percent national-security tariffs on exports of Canadian aluminum, which is a move reportedly opposed by producers on both countries.

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