Slocan blasts "absurd" U.S. lumber penaltiesThis case may well speed the correction of the softwood lumber issue and speed the normalization of the forest industry.
Thursday November 8, 4:14 pm Eastern Time
Slocan blasts "absurd" U.S. lumber penalties
VANCOUVER, British Columbia, Nov 8 (Reuters) - Slocan Forest Products Ltd. (Toronto:SFF.TO - news), the company hit with the highest anti-dumping penalty in the U.S.-Canada softwood lumber dispute, complained on Thursday that its penalty was based partly on the cost of five boards donated to a charity group.
The company cited the decision to use the donation in calculating the penalty as an example of the ``absurdity'' of the U.S. action, which it is considering challenging with a lawsuit through the North American Free Trade Agreement.
``It makes a mockery of commercial reality... to call it absurd is an understatement,'' chief executive Jim Shepherd told reporters prior to a meeting between Canadian lumber executives and Prime Minister Jean Chretien.
The U.S. Commerce Department last week imposed a 19.2 percent penalty on western Canadian based Slocan, to counter what it alleged was the company's unfair selling of lumber in the United States at below market value.
Slocan was one of six companies investigated by the United States to calculate the penalty on the Canadian lumber industry. Most producers will pay a 12.58 percent penalty.
The anti-dumping penalty is in additional to a 19.3 duty imposed by the United States on Canadian producers in August to counter what their U.S. rivals allege are unfair government subsidies that lower the Canadians' production costs.
In calculating the anti-dumping duty, U.S. investigators compared the prices Slocan charged for lumber in Canada and in the United States.
Shepherd said in the case of 2x4 lumber sold in 12-foot lengths, the price Slocan received for 30 million board-feet of lumber sold in the United States was compared to the price assigned to five boards donated to a Canadian charity group to build a small shed.
Slocan estimated the comparison was responsible for up to 3 percent of the 19.2 percent penalty and could cost it $10 million per year.
``It is very clear to us that we have been badly wronged. Our company and our employees are being used as pawns by U.S. protectionists,'' Shepherd said.
Canada's largest lumber producer, Canfor Corp. (Toronto:CFP.TO - news), filed a lawsuit this week claiming the U.S. penalties violate the North American Free Trade Agreement and is seeking at least $250 million in damages.
Shepherd said his company was investigating if it can also file a NAFTA suit.