A three-man panel ruled that the 1930 U.S. Tariff Act and later amendments will not allow the U.S. to levy unfair duties on Canadian goods with the expiry of a softwood lumber pact between them.
The case was launched in September last year as a pre-emptive move to stall possible action by the United States in the WTO over export restraints Canada imposes on its own lumber.
Under the terms of the softwood lumber agreement, which expired at the end of March, the U.S. restricted lumber imports from Canada to counter what it saw as effective subsidies to Canadian lumber producers. Much of Canada's softwood is harvested on Crown land at much lower cost to lumber producers, allowing it to be unfairly priced, the U.S. said.
In return, Canada imposed a fee on softwood exports to the United States over a set ceiling.
With the agreement expired, Canada feared that the Tariff Act would allow the U.S. to impose duties, not only on lumber, but against Canadian wheat, textiles, cattle and sugar syrup as well.
Canada says the Act allowed for export restraints operated by a trading partner to be treated as subsidies, which could be balanced by U.S. countervailing duties.
