U.S. claims victory in lumber case against Canada

Thu Feb 26, 2009 9:39pm EST
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WASHINGTON (Reuters) - An international tribunal has ruled for the United States in a dispute with Canada over a softwood lumber deal struck in 2006, the U.S. Trade Representative's Office said on Thursday.

The decision requires Canada to fix its breach in the agreement within 30 days, acting U.S. Trade Representative Peter Allgeier said in a statement.

Ottawa also must collect an additional 10 percent export charge on softwood lumber shipments from Eastern Canadian provinces until C$68.26 million ($54.8 million at current exchange rates) has been accumulated, he said.

"We are pleased with the tribunal's decision," Allgeier said. "This dispute settlement proceeding is now at an end. We look forward to Canada working quickly to cure the breach."

Canadian officials said they were disappointed with the ruling and would discuss with Canadian industry and provinces how to implement it.

"Canada remains committed to the success of the Softwood Lumber Agreement, which has ended a long-standing dispute and has brought certainty and stability to the lumber industry," Canadian Trade Minister Stockwell Day said in a statement.

The softwood lumber agreement runs for seven years, with the possibility of an extension for two years. It ended a dispute over duties the United States had imposed on Canadian lumber to offset what it said were unfair pricing practices.

Canada agreed in the 2006 deal to impose taxes and volume caps on exports to the United States when the prevailing price of lumber is at or below $355 per thousand board feet.

The measures become more stringent as the market price of lumber falls. This month, the prevailing monthly price of lumber is $207 per thousand board feet, the U.S. Trade Representative's Office said.   Continued...

<p>A pile of cut logs sit on Spanish Banks in Vancouver, British Columbia April 26, 2006. REUTERS/Andy Clark</p>