U.S. industry pegs Canadian softwood lumber subsidy to 30%
A U.S. lumber lobby sent the Commerce Department a detailed analysis for recalculating Canadian timber subsidies as required by a North America Free Trade Agreement panel on Aug. 13.
The Washington-based Coalition for Fair Lumber Imports said the total Canadian subsidy calculation increases the countervailing duty rate to between 22 and 30 percent based on alternative approaches to subsidy measurement under Commerce regulations.
For years, U.S. lumber interests have accused Canada’s softwood lumber producers of selling their products well below market value, because they receive subsidies from the provincial governments.
“Unfair Canadian lumber imports have caused scores of U.S. sawmill shutdowns, thousands of U.S. job losses and the undervaluing of millions of U.S. family timber holdings,” the coalition said.
Commerce investigated Canadian lumber subsidies in 2001-02 and issued an 18.8 percent subsidy determination in May 2002. The NAFTA panel affirmed most of Commerce’s findings, except that U.S. timber prices could not be considered “world prices” within the meaning of Commerce’s regulations and the price benchmark must be explained and adjusted by Oct. 13.
The coalition report describes three approaches to subsidy measurement that Commerce is authorized to use:
* Base subsidy measurement on prices for comparable U.S. timber immediately in the U.S. side of the border and adjust according to the NAFTA panel’s guidance.
* Base subsidy measurement on price of logs harvested from comparable timber immediately on the U.S. side of the border to avoid many of the “adjustment” issues that the NAFTA pane found to be of concern.
* Base subsidy measurement on Canadian log export and import prices, again, given that timber values are a residual component of log prices.