U.S. Says WTO Ruling Misfires
U.S. Trade Representative Robert Lighthizer says a World Trade Organization (WTO) panel report applies an “erroneous Appellate Body interpretation” and would shield Canada’s massive lumber subsidies from U.S. action imposing countervailing duties to support the U.S. softwood lumber industry and its workers.
“This flawed report confirms what the United States has been saying for years: The WTO dispute settlement system is being used to shield non-market practices and harm U.S. interests,” Lighthizer says. “The panel’s findings would prevent the United States from taking legitimate action in response to Canada’s pervasive subsidies for its softwood lumber industry.”
The U.S. is weighing its options in response to the WTO ruling.
The U.S. has expressed concerns about unfairly dumped and subsidized imports of softwood lumber products from Canada for nearly 40 years, and there is a long history of litigation over the issue at the WTO and in domestic courts. In 2017, the U.S. Dept. of Commerce and the U.S. International Trade Commission (USITC) found, for the third time in three decades, that the Canadian federal and provincial governments are subsidizing Canadian softwood lumber producers mostly through inaccurately determined and depressed stumpage costs, allowing Canadian producers to sell subsidized softwood lumber in the U.S. market and causing material injury to U.S. softwood lumber producers.
However, a WTO panel said the U.S. Dept. of Commerce had repeatedly acted inconsistently with the Agreement on Subsidies and Countervailing Measures (SCM) and recommended that the U.S. come into conformity with its obligations under SCM.
WTO concluded that the U.S. DOC was flawed multiple times by rejecting proposed private stumpage and log prices in Ontario as a valid stumpage benchmark; by rejecting proposed BCTS auction prices in British Columbia as a valid stumpage benchmark; by rejecting proposed auction stumpage prices in Québec as a valid stumpage benchmark; by rejecting proposed TDA log prices in Alberta as a valid stumpage benchmark; by erroneously finding that the Nova Scotia benchmark price reasonably reflected the prevailing market conditions in Alberta, Ontario and Québec; by not having proper basis to conclude that stand-as-a-whole pricing was not a prevailing market condition in British Columbia; and numerous other calculations by U.S. DOC that WTO said were inconsistent.
British Columbia Lumber Trade Council (BCLTC) applauded the WTO ruling as vindication of Canada in its challenge to the U.S. DOC’s 2017 subsidy determination.
“For more than three years our industry has paid billions of dollars in countervailing duties that today’s decision confirmed should never have been paid in the first place,” says Susan Yurkovich, President and CEO of BCLTC.
She says the WTO ruling is a scathing indictment of the U.S. Dept. of Commerce’s subsidy findings and the biased process it followed in reaching them.
The U.S. Lumber Coalition stated the WTO panel report represents the latest example of judicial overreach within the WTO seeking to undermine the U.S. trade laws, which makes it harder for U.S. producers to address unfair trade. “Canada’s unfair trade practices in softwood lumber are well documented, and the harm these practices cause to the U.S. forestry industry and workers is undisputed,” says U.S. Lumber Coalition Executive Director Zoltan van Heyningen. “The WTO panel with this report, like other WTO Appellate Body and panel reports, has added to U.S. obligations and diminished U.S. rights, addressing issues it has no authority to address, taking actions it has no authority to take, and interpreting WTO agreements in ways not envisioned by the WTO members who entered into those agreements.”
“While this decision is not binding upon the United States, and thus has no immediate effect on the ongoing Commerce Department proceedings, these deeply flawed WTO panel reports undermine the credibility of the entire WTO system and are harmful to U.S. workers and their communities who depend on the full and effective enforcement of the U.S. trade laws,” adds U.S. Lumber Coalition Co-Chair Jason Brochu. “The U.S. government must reject this blatant attempt by a WTO panel to diminish U.S. rights and the panel’s attempt to deviate and expand from original WTO obligations.”
This past May, a NAFTA panel unanimously affirmed a U.S. International Trade Commission (ITC) finding of harm to U.S. lumber producers caused by unfairly traded Canadian softwood imports.
In November 2016, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION) petitioned the U.S. Dept. of Commerce and the U.S. International Trade Commission to restore fair trade in softwood lumber between Canada and the U.S.
In November 2017, the U.S. Dept. of Commerce determined that Canada subsidizes softwood lumber products and that exporters from Canada have sold softwood lumber in the U.S. at less than fair value, distorting the U.S. softwood lumber market. U.S. DOC promptly placed subsidy and dumping duty rates of varying percentages on several Canadian lumber producers. In December 2017, the U.S. ITC agreed that the U.S. lumber industry is materially injured by the subsidies.
Latest News
Hoffman Companies Acquires Besse Forest Products Group
The Hoffmann Family of Companies (HFOC), a Florida-based family-owned private equity firm, has acquired Besse Forest Products Group, the longstanding Michigan-based family-run company with 10 manufacturing facilities, including four sawmills, a lumber drying concentration yard, four veneer mills and a cut-to-size plywood mill.
Roseburg Names Tony Ramm Senior VP
Roseburg announced that Tony Ramm has been named Senior Vice President of Human Resources and Labor, overseeing the company’s human resources, benefits and compensation, recruitment, and environmental health and safety teams.
When He Talks People Listen
Article by Jessica Johnson, Senior Editor, Timber Processing January/February 2024
Some of the smartest men and women in the industry have graced the pages of this magazine—and have won the award of Timber Processing Person of the Year. They’ve all been incredibly worthy of this recognition for innovation, commitment and love of the industry they serve. Perhaps none have been quite as innovative as the introverted sawmiller from Georgia named Levi Anderson Pollard, V, whose name is on two of the patents that changed the way the sawmilling world manufactures and dries lumber (and on so many other patents as well).
Industry Says Goodbye To Walter Jarck
Walter Jarck, whose career in the forest products industry spanned 65 years and ranged from logging machinery to engineered wood products, died January 3, surrounded by his children, in North Wilkesboro, NC. He was 92.
Carbotech Acquires Sawquip
Carbotech Group has acquired Sawquip, a manufacturing company specializing in the design and manufacture of sawmill equipment for the primary and secondary breakdown of logs into lumber. This acquisition allows Carbotech Group to add on a new field of expertise, providing customers with innovative new solutions for lumber production. Sawquip’s innovative products include log turners and optimized log infeeds, chipping canters, twin and quad circular saw modules, as well as optimized gangs for controlled shape sawing, among others.
Oregon Truckers File Suit Against State
Rob Freres, president of Oregon-based Freres Engineered Wood, a manufacturer of lumber, veneer, plywood and mass timber, has thrown in his support for a lawsuit filed by the Oregon Trucking Assn. and three Oregon-based trucking companies against the state of Oregon for overcharging truckers under the weight-mile tax.
Hasslacher Enters North America
Austria-based Hasslacher group is acquiring a stake in Element5, a mass timber producer specializing in the design, manufacture and assembly of modern engineered timber buildings. Based near Toronto, Can., Element5 employs more than 100 and produces cross-laminated timber and glued laminated timber for the North American market.
Find Us On Social
Newsletter
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
Subscribe/Renew
Timber Processing is delivered 10 times per year to subscribers who represent sawmill ownership, management and supervisory personnel and corporate executives. Subscriptions are FREE to qualified individuals.
Advertise
Complete the online form so we can direct you to the appropriate Sales Representative.