January 27, 2005

U.S. softwood anti dumping duty shaved due to ‘ministerial errors’

VANCOUVER

The U.S. Commerce Department issued two decisions Monday in the tangled softwood trade dispute with Canada, one that drops a few dollars in lumber producers’ pockets and the other labelled ludicrous by an industry spokesman.

Commerce shaved a little off its anti-dumping duty levied against Canadian lumber exports, citing “ministerial errors” in the calculations.

The change means the overall anti-dumping duty paid by softwood exporters drops a quarter percentage point to 3.78 per cent from 4.03 per cent.

However, Tembec Inc. of Montreal will see its duty rate drop to 9.1 per cent from 10.59 per cent and U.S.-owned Weyerhaeuser goes to 7.99 per cent from 8.7 per cent.

Abitibi Consolidated at 3.12 per cent, Buchanan Forest Products Ltd., 4.76, and Canfor Corp., 1.83, will see no change in their anti-dumping levies.

In its announcement in the U.S. Federal Register, Commerce did not spell out the errors but John Allan, president of the B.C. Lumber Trade Council, called them “marginal mathematical corrections.”

The anti-dumping duties were first imposed in May 2002 at an average rate of 8.02 per cent after U.S. lumber producers complained Canadian softwood was being sold at below production costs. The rate dropped to 4.03 per cent after a review last year.

Canadian exporters also pay a countervailing duty of 17.18 per cent set last December to offset what the U.S. industry alleges are provincial subsidies to Canadian producers. The initial rate was 18.79 per cent.

Canada has challenged both duties through the North American Free Trade Agreement and World Trade Organization.

On Monday, Commerce also issued its latest response to Canada’s NAFTA appeal challenging the subsidy claim. Two previous so-called “remands” were tossed back for review as inadequate by the NAFTA panel.

This third remand recalculated the rate of subsidy at 1.8 per cent, down dramatically from 17.18 per cent in Commerce’s December decision, which remains the amount of duty exporters must actually pay.

Its previous NAFTA remands recalculated the subsidy first down to 13 per cent, then to eight per cent.

However, Allan said the drop now to 1.8 per cent is not enough to get exporters out from under the duty altogether, which requires the subsidy rate to fall below one per cent. It’s hoped the NAFTA panel will kick it back to Commerce for another review, he said.

“It will only have practical and legal effect if we can get Commerce to admit the rate should be less than one per cent,” he said.

The 1.8 per cent rate also won’t be applied to the actual countervailing duty paid under the December ruling.

“The rate that applies is the one that came out on Dec. 13,” said Allan.

“What I find curious is in December they tell us by one method the subsidy’s 17.18 per cent and today by another method they’re telling us, ‘Oh, it’s really only 1.8 per cent.’

“It shows you the ludicrousness of the whole situation.”

The Canadian Press

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