WTO rules in Canada’s favour, Softwood lumber is traded fairly

News Release
Lumber Trade Alliance

VANCOUVER, March 22 /CNW/ - The Canadian lumber industry hailed a decision today from the World Trade Organization (WTO) as an unambiguous and complete victory for Canada. The WTO Panel ruled in Canada’s favour on every key issue that Canada raised and said that the U.S. International Trade Commission (ITC) failed to prove not only that lumber imports from Canada would increase substantially but also that any increase would threaten to injure U.S. producers.
The Panel ruling was distributed to parties on December 19, 2003 but the report was made public today.
The WTO Panel is the second independent body that has concluded that every key aspect of the ITC’s case is unsupportable. This WTO Panel decision confirms what the NAFTA Panel said last September when it also rejected the ITC’s finding that Canadian lumber imports would threaten to injure the U.S. industry.
This is a massive victory for Canada - first the NAFTA Panel and now the WTO Panel - have rejected on virtually identical grounds all of the evidence and reasoning underlying the ITC’s affirmative threat determination. Although the WTO Panel decision was addressing the ITC’s original determination, it is effectively an indictment of the ITC’s remand determination as well, which has repeated all the same errors that the WTO identified today with the ITC’s original determination.
After carefully reviewing all of the evidence, the WTO Panel held that “we can find no rational explanation in the USITC’s determination, based on the evidence cited, for the conclusion that there would be a substantial increase in imports imminently,” a conclusion that the Panel held “is not one that could have been reached by an objective and unbiased investigating authority.”
The WTO Panel also said that the ITC had failed to demonstrate the future injury it predicted would be caused by Canadian imports, citing in particular the absence of any finding that Canadian market share would increase in the future.
According to the Panel, “In the absence of some increase in Canadian market share in the future, it is difficult to see how the USITC could come to the conclusion that Canadian imports would cause injury in the future when they had not done so during the period of investigation, despite their significant and increased volume and market share.”
The Panel also said the ITC made “a glaring omission” because of its one- sided examination of future market conditions, which focused only on imports from Canada and ignored entirely the likely supplies from the US industry itself and third countries.
The Canadian Lumber Trade Alliance includes: The BC Lumber Trade Council, Alberta Softwood Lumber Trade Council, the Ontario Forest Industries Association, the Ontario Lumber Manufacturers Association, Free Trade Lumber Council, and the Québec Forest Industry Council.