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BRITISH COLUMBIA FRUSTRATED AT U.S. RULING

 BRITISH COLUMBIA FRUSTRATED AT U.S. RULING
 VICTORIA, British Columbia, May 15 /PRNewswire/ -- A U.S. Department


of Commerce ruling that British Columbia subsidizes the production of lumber is frustrating, Premier Mike Harcourt said today (Friday).
 "This decision shows the extent to which the United States is prepared to pander to special interests," said Harcourt.
 "The Free Trade Agreement is supposed to protect us from this kind of arbitrary action -- so far, it has been ineffective."
 Harcourt said he will urge Prime Minister Mulroney to protest strongly the countervailing duty action when he meets with President Bush next week.
 The Department of Commerce, in its final ruling on Friday, will require importers of British Columbia lumber to provide a bond or cash deposit equal to the alleged subsidy rate of 6.51 percent. The duty is based on alleged subsidies from timber pricing and log export controls.
 Forests Minister Dan Miller said the U.S. decision is "completely unjustified."
 "It strikes a blow at the economy of British Columbia as well as the Pacific Northwest region of the United States," said Miller.
 "What you are seeing here is bureaucrats in Washington, D.C., who are wizards at dispensing political favors to industry in the southern United States -- an industry that urged the Department of Commerce action against us."
 Miller said the governors of Idaho, Oregon and Washington -- as well as U.S. congressmen, American trade unions and industry associations -- have supported British Columbia's position on log export controls.
 He said a senior Department of Commerce official -- the deputy assistant secretary of commerce -- testified under oath last year that British Columbia was not subsidizing its lumber producers.
 "Nothing has changed since then -- it is clear the recent decision has no rational basis and is driven by protectionism," said Miller.
 He said that the U.S. International Trade Commission will announce on July 3 if Canadian exports of softwood lumber are injuring the U.S. lumber industry.
 "There is a chance that at this final stage in the U.S. process, reason and law will prevail, but we cannot depend on that," said Miller. "As a result, Canada must appeal today's decision to a Free Trade Agreement panel."
 Trade Minister David Zirnhelt said the Department of Commerce decision will translate into lost markets in the United States and reduced employment in British Columbia.
 "The Free Trade Agreement has not given us the security of market access that we were promised," said Zirnhelt.
 "The continuation of U.S. harassment and politically motivated actions despite the FTA raises serious additional questions about the North American Free Trade Agreement negotiations," said Zirnhelt.
 "This decision is another sign that British Columbia will have to seek out more secure markets and that we can't depend on the United States."
 -0- 5/15/92
 /EDITOR'S NOTE: Backgrounder available upon request./
 /CONTACT: Hartley Lewis, director, Economics and Trade Branch, Ministry of Forests, 604-387-8374/ CO: ST: British Columbia IN: PAP SU:


JL-EH -- LA047 -- 1052 05/15/92 20:32 EDT
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Date:May 15, 1992
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