WTO: U.S. Duties On Canadian Softwood Violate Trade Rules

By Agence France-Presse The World Trade Organization (WTO) ruled Aug. 11 that U.S. duties on Canadian softwood violate global trading rules and should be recalculated, in the latest twist of a bitter saga between the two neighbors. In a 63-page report, the WTO appellate body, the highest organ to resolve international trade disputes, upheld an earlier finding by a WTO disputes settlements panel. It ruled that U.S. calculations for the tariffs it slaps on Canadian lumber exports, which Washington claims are unfairly subsidized, were unfair. The U.S. government currently applies a method known as "zeroing" when working out the level of duties to impose on Canadian wood, which it believes is sold below the price of production -- a practice known as dumping. "The appellate body recommends that the dispute settlement body request the United States to bring its measures into conformity with its obligations under the anti-dumping agreement," the WTO said in its ruling. The dispute -- one of three lumber cases brought by Canada to the WTO -- was sparked by a U.S. anti-dumping investigation, which resulted in Washington imposing duties ranging from 2.18% to 12.44% on Canadian softwood products in April 2002. The WTO body also reversed an earlier decision that the United States did not violate trading rules when calculating duties for lumber from a particular company involved in the issue, Abitibi. Copyright Agence France-Presse, 2004