Canada to challenge U.S. softwood lumber duties under USMCA - minister


Adds details, background

Dec 21 (Reuters) - Ottawa on Tuesday launched a challenge under the U.S.-Mexico-Canada (USMCA) trade deal against U.S. duties on Canadian softwood lumber, Canadian Trade Minister Mary Ng said in a statement.

The softwood lumber industry is a key component of Canada's forestry sector, which contributed more than $25 billion, about 1.5%, to the nation's gross domestic product in 2020 and employed nearly 185,000 workers.

The U.S. Department of Commerce nearly doubled the duties to 17.9% in November after a review of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada.

The U.S. accuses Canada of unfairly subsidizing and dumping softwood lumber, commonly used to build homes. Canada denies it is dumping the lumber.

Canada is challenging the results of that review under chapter 10 of the USMCA trade deal, according to a statement from the federal government, in which Ng called the duties "unjustified" and said Canada was "extremely disappointed" about them.

"Canada reaffirms its call for the United States to stop imposing unwarranted duties on Canadian softwood lumber products," she said.

The office of the U.S. Trade Representative and the Commerce Department did not immediately respond to a request for comment.

The Trump administration initially imposed 20% duties in 2018 after the collapse of talks on a new quota arrangement, but reduced the level in December 2020 to 9%. Joe Biden's administration stuck to those duties before the Commerce Department reviewed and decided to double them in November.

(Reporting by Ismail Shakil in Bengaluru; additional reporting by Kanishka Singh; Editing by Mark Porter and Bernadette Baum)

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