NAFTA PANEL FINDS U.S. ANTI-DUMPING DETERMINATION ILLEGAL
Minister of International Trade Jim Peterson welcomed today’s North American Free Trade Agreement (NAFTA) panel decision regarding the West Fraser Mills Ltd. lumber duties. The decision found that the United States Department of Commerce (DOC) determination that it was not required to refund duties paid by West Fraser is inconsistent with U.S. law. The NAFTA panel has ordered the DOC to issue a new determination within 30 days.
“The NAFTA panel decision supports what Canada has maintained throughout this case—the U.S. has an obligation under its domestic law and NAFTA to refund duties,” said Minister Peterson. “We want to see the U.S. do the right thing and refund these duties to this Canadian company. We consider that this panel’s findings set out clearly what must occur if there is no basis for anti-dumping or countervailing duty orders—duties must be refunded.”
On April 21, 2004, the DOC found that West Fraser’s dumping margin was de minimis (i.e. less than two percent). As a result, the company should not have been liable for anti-dumping duty deposits. However, the DOC indicated that it would not refund the duties paid by the Canadian company.
The panel also reconsidered its earlier decision regarding zeroing and found that zeroing is inconsistent with U.S. law. The panel instructed the DOC to issue a new determination without the use of zeroing, which should result in a lower dumping margin. Canadian parties had requested that the panel review its earlier decision in light of the August 11, 2004, Appellate Body ruling which found the U.S. practice of zeroing to be inconsistent with its World Trade Organization (WTO) obligations.
Zeroing is the practice of assigning a value of zero—rather than a negative value—to the results of comparisons between domestic and export prices when establishing a margin of dumping. This practice has the effect of making the dumping rate higher than would otherwise be the case if zeroing were not used.
