Canada opens WTO case against United States over lumber duties

A pile of logs is pictured in Squamish, British Columbia, Canada April 25, 2017. REUTERS/Ben Nelms

OTTAWA (Reuters) - Canada on Tuesday formally opened a case against the United States at the World Trade Organization over a recent Commerce Department decision to impose duties on Canadian lumber exports, the foreign ministry said.

A ministry statement said Canada would forcefully defend the lumber industry against the “unfair, unwarranted and deeply troubling” decision.

Earlier this month Canada launched a NAFTA trade challenge against duties affecting about $5.66 billion worth of U.S. lumber imports.

The Office of the U.S. Trade Representative is confident the Department of Commerce’s actions “fully comply” with WTO rules, said USTR spokeswoman Amelia Breinig, in a statement.

In any case, Canada’s decision to open a case with the WTO is premature, she said, since final duties are not yet in place, pending a decision by the U.S. International Trade Commission on whether imports of Canadian lumber have harmed U.S. producers.

That decision is expected in December.

The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. Canada denies it is dumping the lumber.

The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land. They are lower than fees paid on U.S. timber, which comes largely from private land.

Reporting by David Ljunggren in Ottawa and David Lawder in Washington; additional writing by Rod Nickel in Winnipeg; Editing by Andrew Hay and Chris Reese