Canadian International Trade Minister Jim Peterson said a US refusal to abide by a key trade panel decision in favor of Canada in a dispute over softwood lumber is untenable, and it cannot just flout rulings that it doesn’t like.
At the same time, Canada is stepping up efforts to find new markets for Canadian lumber. Peterson singled out China as offering great potential because of its rapid development.
He said he put forward Canada’s position “forcefully” at his first meeting with David Wilkins, the new US ambassador to Canada, in Ottawa.
“We pointed out that the US position is based on what we consider a very untenable position - that is, that duties collected, even in the face of an adverse ruling, do not have to be returned,” Peterson said in a telephone interview after the meeting.
“Taken to its logical extreme, even if the US authorities committed an administrative or mathematical error in computing the duties, they wouldn’t have to return them in the face of a NAFTA panel ruling in the favor of Canada,” he added.
Canada wants an end to the antidumping and countervailing duties that the US imposed on Canadian lumber shipments in 2002. It wants the US to return some C$5 billion in duties that have been collected.
Last month, Canada called off discussions on the file after the US refused to abide by the ruling of the North American Free Trade Agreement panel.
Peterson said Canada will only resume talks when it is in its best interests. But so far, “we have seen little in terms of a reasonable US position other than saying let’s negotiate,” he said.
He urged the US not to let a special interest group jeopardize NAFTA. The Coalition for Fair Lumber Imports, a US lumber industry group, is challenging the constitutionality of US legislation implementing NAFTA’s dispute settlement system.
Canada is currently studying its options, including litigation and retaliation. Peterson said he will hold a conference call with his counterparts from the provinces on Oct. 4 to update them.
“We’ll be discussing with them some of the steps going forward and getting their opinions,” he said.
Canada will also bring up the issue at the Oct. 6-7 NAFTA Commission meeting in Acapulco, Mexico, he said.
On Canada’s efforts to find other markets, Peterson said there are probably about 30 countries that might be interested.
“China of course has huge potential because of its urbanization,” he said.
(DJCS via Comtex)