WTO Issues Mixed Ruling on U.S.-Canada Softwood Lumber Duty Dispute

SEATTLE (Scrap Monster): The World Trade Organization (WTO) has issued mixed ruling on lumber dispute between the U.S. and Canada.

According to the dispute ruling published online on WTO website, the organization noted that the U.S. has clearly violated international rules in calculation of tariffs on softwood lumber imported from Canada. On the other hand, it declined to prohibit zeroing method used by the U.S. in calculation of anti-dumping duties on Canadian lumber, which was allegedly causing higher duty margins.

Meantime, Robert Lighthizer, U.S. Trade Representative stated that the latest WTO ruling overrides all previous WTO appellate body decisions which had prohibited zeroing. The appellate body has been exerting undue pressure on panels for several years on this issue, he noted. Further, Lighthizer commended the panel for upholding zeroing, which by itself is a victory for the U.S.

However, Canadian Foreign Minister Chrystia Freeland stated that the country is considering an appeal on WTO’s ruling on zeroing. She appreciated WTO’s finding that the U.S. violated rules in the calculation of anti-dumping margins. It must be noted that both the countries have 60 days to decide on whether to appeal the ruling.

Currently, the U.S. imposes countervailing duties of up to 18% and anti-dumping duties of up to 7.28% on Canadian softwood lumber. The country imported $5.9 billion worth of softwood lumber from Canada in 2018.