B.C Minister confronts US ITC’s preliminary determination on lumber imports

VANCOUVER (Scrap Monster): The Forestry Minister Steve Thomson, in a statement issued yesterday, has confronted the initial determination by the US International Trade Commission (ITC) on the ongoing softwood lumber dispute between the two countries. It must be noted that the ITC had announced its preliminary determination that there exists reasonable indication that US domestic lumber industry is materially injured by the softwood lumber products imported from Canada.

The news release by the ITC had alleged that the softwood lumber products imported from Canada were subsidized and sold in the US market at less than fair value, thereby impacting US local industry. US ITC Chairman Irving A. Williamson, Vice Chairman David S. Johanson, and Commissioners Meredith M. Broadbent, F. Scott Kieff, and Rhonda K. Schmidtlein voted in the affirmative. Commissioner Dean A. Pinkert had not participated in these investigations. The investigations were initiated further to trade petition filed by the US Lumber Coalition in November 2016.

Following the initial affirmative determination by the ITC, the US Department of Commerce (DOC) will continue its antidumping and countervailing duty investigations. The determination of countervailing duty will be made before February 20^th. This would force US importers to pay cash deposits by early-March to cover preliminary countervailing duties. The determination of preliminary anti-dumping duty is expected to be made by first week of May this year, which in turn would force importers to pay deposits for anti-dumping duties. Incidentally, the US DOC had launched anti-dumping and countervailing duty investigations on imported Canadian lumber on Dec 16^th last year.

In response, the B.C Forests, Lands and Natural Resource Operations Minister Steve Thomson issued a statement, noting that the US has raised the same allegation that has already been proved false before NAFTA and World Trade Organization (WTO) tribunals. The issue can be resolved only through fair, negotiated trade agreement between the two countries and not through litigations, he added. Thomson reminded that several rounds of talks were being held in 2016, but all had gone futile.

Thomson stated that B.C will continue to support all efforts to resolve the long-pending dispute through a fair agreement. However, in the event of a trade war, the provincial government will stand by the federal government in its fight against the US action. Both sides should now focus on growing their respective economies, rather than wasting time, energy and resource in costly litigation, Thomson added.

The lumber trade dispute between the two countries is dated back to 1982. The two countries had signed a bilateral agreement in September 2006. The original seven-year agreement had an optional provision to extend for a period of two years upon consensus by both parties. Accordingly, the deal which came to an end in 2013 was extended until 2015. As per the terms of the deal, parties were prohibited from engaging in trade actions for one-year grace period, which has already come to an end on 12th October, 2016.