NEW SOFTWOOD LUMBER DUTY WOULD STILL HURT INDUSTRY

Government Relations Minister Len Taylor said today the U.S. latest softwood lumber duty rate moves in the right direction but he won't be satisfied until the duty rate is zero. Taylor cautioned producers that a new lower duty will be months away if indeed the duty is ever put in place.

The United States Department of Commerce issued a new duty rate in the softwood lumber countervailing duty case, that could result in a modest drop in the rate from 18.79 per cent to 13.23 per cent if eventually accepted by the NAFTA Panel.

"Although a lower duty would provide some measure of relief to our industry, the panel process means that any such relief, if it comes at all, is likely many months away," Taylor said. "In the meantime, both of the U.S. duties remain in place and our lumber companies and their workers are still being hurt. We continue to maintain that these duties, at whatever level, are unjustifiable and unfair."

On August 13th, 2003, the NAFTA panel hearing Canada's complaint against the U.S. countervailing duty on softwood lumber ruled in Canada's favour. The panel ordered the U.S. to recalculate that duty to correct several errors and to provide better evidence establishing that provincial timber-pricing, or stumpage programs actually are providing an illegal subsidy to Canadian producers.

In an attempt to comply with the panel's decision, the U.S. has now submitted this new 13.23 per cent duty rate based on a newly constructed benchmark for estimating the size of the alleged provincial subsidies.

"This development does not settle the fundamental issues that we are contesting in this case," Taylor said. "In fact, the new method being used by the U.S. to calculate the alleged subsidy and duty rate will likely just prolong, rather than settle, our legal challenges. Saskatchewan is committed to continuing to challenge these U.S. duties through both the NAFTA and World Trade Organization dispute settlement mechanisms."

Saskatchewan will continue to consult with the industry and the federal and other provincial governments to determine 'next steps', both on the legal cases and on the parallel effort to arrive at a mutually acceptable, non-litigated or policy-based resolution of this dispute.

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For More Information, Contact:

Anna Arneson Government Relations and Aboriginal Affairs Regina Phone: (306)787-8008