Remand Determination
Implementing a NAFTA Panel Decision: Canada's Challenge to the
Final Determination in the Countervailing Duty Investigation on
Imports of Softwood Lumber from Canada

On January 12, the Department of Commerce (the Department) filed a remand determination in response to a NAFTA Panel's decision on our final determination in the countervailing duty investigation on softwood lumber from Canada.

In its August 2003 decision, the Panel asked the Department to reconsider the methodology used to measure the benefit accruing to Canadian lumber producers from Canadian Provincial stumpage programs as well as certain company exclusion, scope, and calculation issues.

Findings on the Calculation of the Subsidy Rate: While the Department is still of the view that the benefit calculation methodology applied in the investigation accurately reflects the value of the subsidy received by Canadian producers, in this remand the Department revised its methodology consistent with the Panel's decision. Consistent with the applicable statute, regulations and the Panel's decision, the methodology employed in the remand applies a benchmark constructed on the basis of Canadian log prices and import values of logs, adjusted for harvesting costs. Using this methodology, the calculated benefit rate is 13.23 percent, so that the combined average AD/CVD rate would be 21.66 percent.

Based on this revised methodology, two Quebec companies, Scierie West Brome, Inc.and Les Produits Forestiers Dube, Inc., were found to have received de minimis subsidies, and are therefore excluded from the order.

Other Findings in the Remand Determination:
In addition, on remand the Department determined that certain Maritime-origin lumber and old lumber (more than 10 years old), including used railroad ties, are excluded from the scope of the order. As a result of this determination, certain companies that export only these now-excluded products will not be subject to the order.

Effect of Remand Determination:
The filing of this remand has no immediate effect on the existence of the countervailing duty order. Pending the final results of the NAFTA panel proceeding, cash deposit rates will continue to be required at the rate currently in place (18.79 percent), with a combined average AD/CVD duties of 27.22 percent.

Furthermore, the remand has no effect on the rate at which entries will ultimately be liquidated. The Department of Commerce is currently conducting the first administrative review of the CVD order which will provide the assessment rates of all entries from May 22, 2002 through March 31, 2003. The deadline for the completion of the preliminary results of this administrative review is June 1, 2004.