U.S. International Trade Commission says Canadian softwood lumber caused harm

The U.S. International Trade Commission says it has found there was a reasonable indication that softwood lumber products from Canada materially injured American producers, setting the stage for the imposition of preliminary duties that softwood producers fear could impact Canadian jobs.

The trade commission announced Friday that it made an initial determination of harm from Canadian lumber that is "allegedly subsidized and sold in the United States at less than fair value."

It said the U.S. Commerce Department will continue anti-dumping and countervailing duty investigations launched Dec. 16 into the imported products.

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"In the final phase, which is a much longer and much more in-depth investigation, the commission will make a determination whether the U.S. industry is injured by reason of the imports," said spokeswoman Peg O'Laughlin.

The preliminary finding could force U.S. importers of Canadian lumber to pay cash deposits to cover preliminary countervailing duties in early March, followed in mid-May with deposits for any anti-dumping duties, unless the deadlines are extended.

Canadian softwood producers say the duties would result in job losses and plant closures north of the border.

International Trade Minister Chrystia Freeland said Canada is prepared for any situation and the government will vigorously defend the interests of Canadian workers and producers.

"Our softwood lumber producers and workers have never been found in the wrong; international bodies have always sided with our industry in the past," she said in a statement.

The decision to investigate is in response to petitions filed in November from the U.S. Lumber Coalition, which alleges that provincial governments, which own most of Canada's vast timberlands, provide trees to Canadian producers at rates far below market value, along with other subsidies.

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B.C. Forests, Lands and Natural Resource Operations Minister Steve Thomson said the allegations of unfair trade practices are unfounded.

"These are allegations that, time after time, have been proven to be false before NAFTA and World Trade Organization tribunals," Thomson said in a release.

"B.C.'s forest policies are trade compliant. This issue can be resolved only with a fair, negotiated trade agreement with the United States, not more litigation," he said.

"It is in the best interest of both sides to quickly come to terms on a deal and get back to focusing on growing our respective economies rather than wasting time, energy and resources in costly litigation," he added.

However, B.C. is prepared to fight, along with the federal government, against the U.S. action, he added.

Canada exported about $4.7 billion US worth of lumber to the U.S. last year, according to the U.S. Commerce Department.