Canadian officials were seething yesterday over a preliminary World Trade Organization ruling that found the United States had complied...
TORONTO — Canadian officials were seething yesterday over a preliminary World Trade Organization ruling that found the United States had complied with international law when it imposed billions of dollars in duties on Canadian lumber imports.
The confidential ruling, released to both countries Monday, has fueled further talk of a trade war between the world’s largest trading partners, and concerns that the rules of free trade under the North American Free Trade Agreement between the United States, Canada and Mexico may be unraveling.
A NAFTA panel on Aug. 10 dismissed U.S. claims that Canadian softwood exports are subsidized by Ottawa and therefore damage the U.S. lumber industry.
But Canada’s satisfaction with the perceived victory was short-lived. Washington, D.C., shrugged off the ruling, saying it didn’t deal with a 2004 decision by the U.S. International Trade Commission, which found in favor of the United States. And U.S. Trade Representative Rob Portman pledged to maintain punitive tariffs.
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Further supporting the U.S. position is the WTO, which found U.S. lumber mills were, in fact, threatened by government-subsidized lumber imports from Canada.
The finding has infuriated Canadian officials, who contend the Aug. 10 NAFTA ruling means Washington must reimburse more than $4.1 billion in punitive tariffs levied against Canadian lumber companies since 2002.
“We want the United States to live up to and respect the NAFTA,” Canadian Trade Minister Jim Peterson said yesterday.
He said the WTO ruling — which won’t be final or made public until October — would likely be appealed to the Court of International Trade and would not sway Ottawa from considering retaliatory tariffs against U.S. imports.