FREE TRADE MY ASH!
dailynews.yahoo.com
Tuesday August 21 4:45 PM ET
Canada to Challenge U.S. Lumber Duty
YELLOWKNIFE, Canada (AP) - If Americans want Canadian oil
and gas, they must also open their doors to Canadian lumber, Prime
Minister Jean Chretien has told President Bush (news - web sites).
Stepping up moves against a U.S. tariff on Canada's $10 billion-a-year
softwood lumber exports, Chretien's government announced Tuesday it
will challenge the duty before the World Trade Organization (news -
web sites).
Chretien spoke with Bush by phone on Monday about the 19-percent U.S. tariff on Canadian lumber
imports.
``You want gas, you want oil and you don't want wood?'' Chretien said, in Yellowknife, the
Northwest Territories. ``It's too bad, but if you have free trade, you have free trade. And I explained
it very clearly. You know me.''
It was the first time Chretien has suggested a link between the growing softwood lumber dispute and
other areas of Canada-U.S. trade.
A White House spokesman confirmed that Bush talked by telephone from Air Force One with
Chretien on Monday. Sean McCormack called it a ``good conversation,'' but confirmed that the
contentious issue of Canadian softwood lumber was raised.
In a sign, perhaps, that the White House was stung by Chretien's call, aides did not immediately
discuss it. The White House, which normally tells reporters about Bush's telephone calls to foreign
leaders, did not mention the call to Chretien until after the Canadian made mention of it.
Chretien has previously dismissed opposition calls to use Canada's energy wealth as a lever in the
lumber dispute, saying it would not be in Canada's interest to start a tit-for-tat trade battle with the
United States.
``I spoke clearly to him and he understands it is a problem that has to be resolved,'' Chretien said of
his conversation with Bush. ``We're working to solve the problem.''
Announcing the WTO challenge, Canada's International Trade Minister Pierre Pettigrew said in a
speech in Edmonton that the U.S. tariff was unwarranted and punitive.
He said the U.S. Commerce Department (news - web sites) had acted against WTO rules by
imposing the duty on Canada's softwood lumber exports. Only the Atlantic provinces are exempt.
Officials say the duty, which takes effect this week, could cost the Canadian industry $2 billion a year
and has already forced layoffs at several lumber mills in British Columbia.
The duty was imposed after the U.S. Commerce Department ruled that Canadian lumber was
subsidized through low provincial timber-cutting fees, or stumpage.
But Pettigrew said the U.S. interpretation of stumpage as a financial contribution from the government
is flawed.
``We fully intend to continue to fight the United States trade action in every legal venue available,''
Pettigrew said. ``Canada will not bend to unsubstantiated allegations based on protectionism.
``Our industry wants and demands free trade in softwood lumber,'' he said.
If the Geneva-based WTO finds in Canada's favor, Washington would have to rescind the duty or
Ottawa would be given permission to impose retaliatory sanctions.
The Canadian challenge will ask that the WTO fast-track the dispute settlement process, which can
take months to get started.
Pettigrew plans to discuss the issue with provincial forestry ministers in Montreal on Friday. |
