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GOVERNMENT ENCOURAGED BY WTO RULING ON SOFTWOOD LUMBER

Released on May 28, 2003

Intergovernmental Relations Minister Eldon Lautermilch said that yesterday's interim report by the World Trade Organization (WTO) on the U.S. final determination of subsidy respecting Canadian softwood lumber exports is good news for Canadian producers and another important step forward in resolving this dispute in Canada's favour.

The interim report supports Canada's position that the U.S. final subsidy determination was flawed and that the U.S. countervailing duty on Canadian softwood lumber exports violates international trade rules.

"This WTO ruling does not end the softwood lumber dispute but it is another step in the right direction," Lautermilch said. "This report reconfirms that the U.S. has failed to make the case that provincial timber pricing practices constitute a countervailable subsidy. It says that the U.S. was not justified in levying a 19 per cent duty against our exporters in order to offset this alleged subsidy."

"We will continue to work closely with our federal and other affected provincial governments to pursue these legal challenges through the WTO and NAFTA dispute settlement processes. At the same time, it is in Saskatchewan's interest to continue working with the U.S. and affected governments in Canada on finding a more durable, policy-based solution to this dispute," Lautermilch added.

The WTO's interim report on the countervailing duty will be followed by a final report in July. The final report can subsequently be appealed to the WTO's Appellate Body. This is one of several challenges before WTO and NAFTA trade tribunals that are currently being pursued by affected Canadian governments.

"The countervailing duty of 19 per cent, combined with the antidumping duties ranging from 8-12 per cent, have imposed significant costs on our softwood lumber producers, their employees and the communities where they are located," Lautermilch said.

This report is expected to strengthen Canada's position in negotiating an end to this persistent and costly trade dispute.

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For More Information, Contact:

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

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