Canada considers trade retaliation against the U.S.

August 23, 2005

The government of Canada is demanding that the United States stop applying duties on Canadian lumber and refund the C$5 billion in duties that has been collected. As reported earlier a NAFTA panel rejected Washington's claims justifying those duties, but the U.S. is not abiding by the NAFTA decision.

Canada had asked the WTO for permission to retaliate. Jacqueline LaRocque, a spokeswoman for Canadian Trade Minister Jim Peterson, said that Canada is considering imposing C$5 billion in duties on imports from the U.S. in retaliation. "Canada has wanted to make it very clear that we are not happy with the position of the United States to simply ignore what is a clear NAFTA ruling in Canada's favor," Canadian Finance Minister Ralph Goodale was quoted as saying.

The U.S. is still dealing with a 4 billion dollar ruling against it by the WTO relating to its practice of helping large American companies set up "Foreign Sales Corporations" offshore in order to have a competitive edge in Europe. That dispute resulted in the U.S. having to change its laws last year.