Canada vows to fight WTO lumber ruling

WTO rules in favor of U.S. “zeroing” practice.

BY HBSDealer Staff

Last week the World Trade Organization (WTO) sided with the United States in regard to its anti-dumping policy on softwood lumber imports from Canada.

The WTO also ruled in favor of the U.S. practice of “zeroing” – a method that calculates tariffs based on whether the domestic price of a product exceeds the U.S. import price after adjustments are made for transportation and handling costs.

In prior decisions, the WTO has ruled against the zeroing practice.

“The WTO rules do not prohibit ‘zeroing’,” U.S. Trade Representative Robert Lighthizer said. “The United States commends this panel for doing its own interpretive analysis, and for having the courage to stand up to the undue pressure that the appellate body has been putting on panels for many years.”

But the WTO, in report released on April 9, also said that the U.S. had violated international trade rules in how it calculated tariffs on Canadian imports of softwood lumber.

Canadian Foreign Minister Chrystia Freeland said she disagrees with U.S. practices and rulings in favor zeroing.

“We firmly believe that the U.S. duties on Canadian softwood lumber are unfair and unwarranted,” Freeland said in a prepared statement. “That is why we are challenging these duties at the WTO and under NAFTA.”

For years, Canada has been accused of unfairly subsidizing and dumping softwood lumber.

The U.S. and Canada have a 60-day window, since the ruling, to appeal the WTO’s decision.


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