Posted on 04/03/2006 7:03:33 PM PDT by nypokerface
OTTAWA (AFP) - Canada's legal footing in a longstanding and bitter trade dispute with the United States over lumber was shaken by a WTO ruling that upheld US assertions Canada dumped softwood into its markets.
The WTO panel found the US Department of Commerce was correct in its calculations that Canadian firms had sold timber cheaper in the United States than at home or below their production costs.
The decision follows a previous WTO ruling that maintained how the United States calculated duties imposed on Canadian southbound softwood exports and a litany of NAFTA judgments that favored both sides on separate occasions.
Canada immediately disputed the decision, which comes days after its Prime Minister Stephen Harper and US President George W. Bush agreed to appoint special envoys to look into ways to kick start talks to end the trade row.
"We disagree with the WTO decision," Brooke Grantham, a spokesman for Canada's international trade department told AFP. "We're carefully considering our options, including a possible appeal."
"The government of Canada continues to believe that a negotiated resolution is in the best interest of both countries. But if there is not a resolution, we will continue to pursue all our legal options and to support Canada's lumber industry," he added.
Canada broke off talks last year to protest a US decision to continue to collect duties on Canadian softwood imports despite a NAFTA ruling that Canadian imports of softwood lumber had not harmed the US lumber industry.
Canada is seeking a refund of 4.5 billion US dollars in duties on Canadian softwood imports since May 2002, but the United States has balked at the demands.
Instead, US officials have repeatedly pressed for a negotiated settlement.
Last month, a North American Free Trade Agreement panel ruled that Canada does not substantially subsidize its lumber industry and that the United States was wrong to have imposed punitive duties.
If this latest WTO ruling is not overturned on appeal, Canada would lose the right to retaliate against the United States with duties of its own to recoup its losses, officials said.
Don't suppose we can get the WTO to rule against Mexico for doing essentially the same thing with labor.
Happy, Canada? Now shut up.
immigration is bad word now. Illegal is good. Citizenship not needed. Money send home. Take not give. Coyote good job. Sardines show way.
Go figure, eh?
Not sure where you get that idea. Softwood and plywood production in the US per billions of square feet is something like 14 billion, and in Canada never more than three in the last decade. Something like 70% of Canada's lumber goes to the US, but that's because US production of lumber can't keep pace with demand, not because of Canadian domination of the market. Thus, the US uses its own output (minus exports) AND 70% of Canada's.
As the US has argued in this case, the Canadian lumber industry is de facto government supported. We don't much lahk commie lumber down heyah! /jk
I'll bite, why would the tariff help the Canadians?
We still have our sovereignty ping. I'll bet they still want our vitamins though.
What this has really done is make Canadian producers far more cost-efficient in markets where the U.S. tariff doesn't apply -- which means everywhere else in the world outside the U.S. With production costs that are 30% lower in Canada, U.S. mills can't even compete with Canadian producers in the global market.
So the end result of the tariff is that you've got lumber mills shut down all over Oregon and Washington, and U.S. consumers paying prices for lumber that are 30% higher than they should be.
This is why import tariffs are almost always utterly senseless.
Now, that's an idea!!!
BTW, how did that cig tariff work out for you?
These numbers may have changed due to the relief/rebuilding efforts in the aftermath of the hurricanes last year, but the U.S. can only meet about 50%-60% of its own lumber demand. Canada is far and away the largest supplier of lumber to the U.S., so I suspect the difference between U.S. and Canadian production is much smaller than what you've posted there.
(Note: I'm not Canadian, so if this was a tariff imposed in Canada I probably don't know much about it.)
I appreciate the information...however, I am not certain how one would conclude that the raw costs are 30% lower than that of the US merely because the volume of their product is higher than ever before.
Would it not also be true that the demand from the destruction caused by multiple hurricanes might have increased demand in the US so that even at the higher prices there would have been a higher demand?
Isn't there always an incentive to decrease costs and efficiency for the sake of profit? Why would the US producers not be able to implement the same savings?
Are the Canadian producers robbing Peter to pay Paul to make their margins higher?
I'm not in the lumber business.
Lumber mills in parts of western Canada have access to an enormous supply of lumber that can be purchased for almost nothing. Energy companies are cutting down trees all up and down the eastern slopes of the Rocky Mountains to clear space for all the new oil and gas operations up there, and they the raw timber is sold for peanuts just to make whatever money they can on the side.
Sorry, but check your facts. The US production in the last TEN years has been over 12 billion; Canadian has NEVER gotten above 3. Not sure why you repeated the US lumber demanded when I already mentioned it myself; the US is buying its own lumber from American producers AND Canadian lumber.
You can suspect the numbers all you like, they are updated to 2005. Do some research; most of the stats are professional subscription-only sites, but you can find them.
Get over your Canadian pride. ;)
Isn't there always an incentive to decrease costs and efficiency for the sake of profit? Why would the US producers not be able to implement the same savings?
I think the real reason the U.S. producers couldn't implement the same cost reduction measures was that Canada's mills are generally newer and more efficient to begin with -- especially after the tariff drove so many of the older mills in British Columbia out of business.
Would it not also be true that the demand from the destruction caused by multiple hurricanes might have increased demand in the US so that even at the higher prices there would have been a higher demand?
That's an issue that has only come into play in the last six months. Before that, the U.S. lumber industry was in pretty bad shape. I'd be curious to see just how well the industry has recovered in recent months, but I believe the primary impact has been a steep increase in lumber imports. The latest issue of The Journal of Commerce shows some decent gains in lumber imports from Canada, and huge gains in imports from Sweden and Germany.
Because forests in Canada are owned by the provincial governments -- and there aren't too many environmentalist wackos in Alberta. I think they have a hunting season for them up there.
Then why have U.S. lumber producers been going out of business in record numbers in the five years since the tariff has been imposed?
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