Forest Products: Trade Policy Highlights


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	FOREST PRODUCTS TRADE POLICY HIGHLIGHTS - JANUARY 2005
	Canada Initiates New Legal Challenges in Lumber Dispute
	On January 14, 2005, Canada announced plans for a NAFTA challenge to the recent U.S. administrative review of countervailing duties (CVD) on Canadian softwood lumber. The U.S. review, issued in December 2004, lowered the CVD rate from 18.8 to 17.2 percent, which was much less than what the industry had expected. At the same time, Canada also requested that the WTO approve C$200 million in sanctions against U.S. imports as retaliation for the U.S.’ failure to comply with WTO Dispute Settlement Body (DSB) rulings. The U.S. countered that it had fully implemented the DSB’s recommendations; the issue has been referred back to the original WTO panel for review. Additionally, Canada submitted a notice of intent to appeal to the U.S. Court of International Trade the U.S. International Trade Commission’s most recent threat of injury determination.

	Storm Ravages Northern European Forests
	A major storm pushed through Northern Europe on January 8 and 9, severely damaging large tracts of forestland in Sweden, Finland, Latvia and Estonia, and forcing the industry to rethink harvesting options. An estimated 87 million cubic meters of wood was downed due to the storm with 70-80 million cubic meters felled in Sweden alone, equivalent to one year’s worth of annual harvest. Estonia was also hard hit, losing the equivalent of 20 percent of its annual production. The sudden supply of coniferous timber is expected to depress prices in Scandinavia, where the price of timber has already fallen by around $13 per cubic meter. This could also strengthen Scandinavian exports to the United States, which grew by more than 20 percent in 2004.