NAFTA HANDS OUT SOFTWOOD LUMBER VICTORY

The North American Free Trade Agreement (NAFTA) panel today ruled in Canada's favour, rejecting the attempt by the United States (U.S.) Department of Commerce (DOC) to use cross-border price comparisons as a benchmark to calculate benefit and establish the level of the countervail duty.

"Saskatchewan softwood lumber producers won today," Intergovernmental and Aboriginal Affairs Minister Eldon Lautermilch said. "The flawed use of the cross-border price comparison, combined with other procedural and technical errors also identified by the panel, clearly show that the countervailing duties have imposed an unfair burden on Canadian softwood lumber exporters.

"We understand that the NAFTA Panel is requiring the U.S. to correct some procedural and technical errors made during the investigation, at the very least, these corrections should result in a reduction of the duty level."

The NAFTA panel provided the Canadian industry with a forum to challenge the flawed U.S. countervailing duties. Although the U.S. will be required to correct its flawed determination, the Canadian industry is still suffering under the combined countervailing and antidumping duties. While progress is being made to resolve the dispute through the various trade panels, the ongoing delays and uncertainty associated with the risk of continued U.S. trade action is taking its toll on the Canadian industry.

The Canadian case in the lumber dispute remains strong. Saskatchewan continues to be engaged in attempts to negotiate a fair and reasonable solution to this ongoing trade dispute. Saskatchewan will continue to work with the other affected provinces, the federal government and industry to defend our provincial forest measures and find a long-term solution to this ongoing trade dispute.

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For More Information, Contact:

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