WASHINGTON (AP) – American lumber producers are still being hurt by Canadian lumber imports, a U.S. trade agency ruled Tuesday in a decision that maintains punitive duties as high as 27 percent on Canadian softwood lumber.

The U.S. International Trade Commission upheld a May 2002 finding that Canadian imports of lumber from pine, spruce and other trees are injuring the U.S. industry. The panel declined to recalculate the duties as requested by a panel set up under the North American Free Trade Agreement.

“Overproduction remains a problem in Canada and the likely market for this excess production is the United States,” the commission said in a 116-page opinion released Tuesday. The quasi-judicial panel approved the ruling 5-0, with one abstention.

Canada’s new International Trade Minister, Jim Peterson, immediately objected to the U.S. panel’s finding.

“We regret that the ITC has come back with a determination that maintains its threat-of-injury finding,” Peterson said in a statement.

Peterson, who took office Friday along with Prime Minister Paul Martin, said he will review the decision, consulting with Canadian provinces and the lumber industry, before deciding his next move.

The ITC ruling comes as the two sides attempt to resolve the long-standing dispute over softwood lumber, which is commonly used in home construction. The United States imported nearly $6 billion of such lumber from Canada in 2002, about one-third of the American market.

Last year, the United States imposed stiff duties on softwood imports from four Canadian provinces after accusing Canada of subsidizing the industry. Canada called the duties unwarranted and protested to the World Trade Organization and a NAFTA dispute panel.

The ruling is of interest in Maine because a lively lumber trade has existed between Maine and border provinces for more than a century, with logs, chips and lumber routinely flowing back and forth across the border.

A proposed deal unveiled this month by the U.S. Commerce Department would give Canadian lumber duty-free access to 31.5 percent of the U.S. softwood market – down from about 34 percent currently – with stiff tariffs on shipments above that level.

The Canadian government has not issued a formal response, but the plan has been met with skepticism north of the border. The quota would be split among the provinces, and Eastern Canadian producers fear the proposed cap would disproportionately hurt them.

Canadian companies also have complained that they would get back only 52 percent of the money paid on duties averaging 27 percent imposed in May 2002, with the rest distributed among American companies.

The ITC decision now goes to the NAFTA dispute panel, which must decide whether to accept the decision or order a reconsideration.

Tuesday’s decision was criticized by a U.S. consumers group, which called on the NAFTA panel to reject the move.

“We should have open trade in lumber between the U.S. and our most important trading partner, Canada,” said Susan Petniunas, spokeswoman for the American Consumers for Affordable Homes, an alliance of lumber users that includes The Home Depot and the National Association of Home Builders.



On the Net:

International Trade Commission: http://www.usitc.gov

Canadian Department of Foreign Affairs and International Trade:

http://www.dfait-maeci.gc.ca/

AP-ES-12-16-03 1914EST



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