U.S. Slaps Tariff on Canadian Lumber
TARIFF
Bangor Daily News
Drew FitzGerald
Boston University Washington News Service
April 8, 2009
WASHINGTON – The United States fired another shot in a decades-long trade dispute with Canada Wednesday by imposing a 10 percent tariff on Canadian softwood lumber imports, alleging that Canadian provinces violated the terms of a court agreement.
The tariff, which U.S. lumber advocates say equals the 10 percent tax that four Canadian provinces were ordered to levy under a Feb. 26 London Court of International Arbitration ruling, will go into effect April 15 and last until the United States collects $54.8 million.
“These are difficult times for everyone, and the U.S. has only asked for fair competition and fair enforcement,” Zoltan van Heyningen, executive director of the Coalition for Fair Lumber Imports, said. “The ruling called for a remedy with an economic effect, and as has been consistently the case in Canada… they try to get out of it. We’re very glad that the U.S. government did not allow this to happen.”
Canada was supposed to impose the taxes by March 28 on lumber from Manitoba, Ontario, Québec and Saskatchewan, according to the ruling. The decision was the most recent arbitration agreement reached in a decades-long dispute over lumber from Canada, which U.S. industry representatives allege is unfairly subsidized by provincial Canadian laws.
The Canadian government offered to satisfy the court decision by paying the U.S. Treasury $46.7 million Canadian [about $37.7 million U.S.], but on April 2 the United States refused the offer. Canadian trade officials said they were disappointed by the tariff and have appealed to the London court for another arbitration session.
“In any relationship between two countries there are times when there are disagreements,” Canadian International Trade Minister Stockwell Day said Tuesday, according to a transcript of remarks with reporters. “We have a disagreement right now with the United States. We have made a payment that we believe satisfies or cures the breach, in the language of the tribunal, related to the softwood lumber dispute. The Americans do not agree with that.”
In a statement, U.S. Trade Representative Ronald Kirk said Wednesday that Canada “made this action necessary” by choosing not to honor its commitments. He acknowledged the double threats U.S. mills are facing from foreign competition as well as from “extremely weak demand.”
Residential construction permits dropped 44 percent in February over the same month in 2008, according to the U.S. Census Bureau.
Sen. Olympia Snowe, R-Maine, in a statement on Wednesday, hailed the U.S. decision to impose a tariff, calling it a strong defense for American workers against unfair competition from trade violations.
“I sincerely hope that this action is the first step toward a renewed willingness on the part of [the Office of the U.S. Trade Representative] to swiftly and consistently enforce U.S. trade rights,” she said.
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