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CANADIAN FOREST INDUSTRY REJECTS NEW SUBSIDY FINDING; WILL CONTEST 'BIASED,' 'HYPOCRITICAL' DECISION

 CANADIAN FOREST INDUSTRY REJECTS NEW SUBSIDY FINDING;
 WILL CONTEST 'BIASED,' 'HYPOCRITICAL' DECISION
 WASHINGTON, May 15 /PRNewswire/ -- The chairman of the Canadian Forest Industries Council (CFIC) today dismissed a new Commerce Department finding on Canadian softwood lumber subsidies as a "political ploy" and vowed to continue the fight against the "economically misguided and factually indefensible" U.S. position.
 In a final determination, the Commerce Department today said the Canadian subsidy amounts to 6.51 percent and that a duty in this amount would be imposed on Canadian softwood lumber exports to the United States. In its preliminary ruling last March, the Commerce Department claimed the subsidy amounted to 14.48 percent.
 Tom Buell, chairman of CFIC, said the latest figure from the Commerce Department is still incorrect and will not lessen Canada's determination to have this matter resolved in an unbiased process.
 "This downward revision is a political ploy to make the decision appear reasonable when, in fact, it is not based on reason at all," he said. "The preliminary decision was wrong, and the final decision is wrong. There is no subsidy. If the Commerce Department expects the new subsidy figure will be more to our liking and the basis for a settlement, it is badly mistaken.
 "This biased decision does not alter the unbiased facts in this matter. Canada does not subsidize its softwood lumber industry and Canadian imports do not injure the American industry."
 Noting that the Department of Commerce initiated the case against the Canadian industry last year, Buell said no one could be surprised that the Commerce Department continued to allege that Canada subsidizes its softwood industry.
 "The Department of Commerce was complainant, judge and jury in this case," he said. "It was an interested party and it has rendered a decision that serves its interests. This economically misguided and factually indefensible decision is the result of a biased process that was politically motivated."
 The Commerce Department's determination maintained that restrictions on Canadian log exports constituted a subsidy to Canada's industry, a decision Buell found particularly objectionable in light of similar American export restrictions.
 "Their decision on log exports is not only factually ludicrous, it is hypocritical in light of America's own log export bans, a point that has been made by some leading American political figures, including Idaho Gov. Cecil Andrus," Buell said.
 Buell also stated that the industry would insist that the Canadian government bring the case to an objective review by a panel established under the Canada-USA Free Trade Agreement.
 "We are completely confident that a fair and thorough examination of the facts would demonstrate that the Canadian industry is not subsidized," he said. "Since the Commerce Department was unable or unwilling to provide an objective examination, we will go to a panel that guarantees one.
 "The Canadian lumber industry is united in its determination to fight this case through to a successful conclusion. We are certain of our legal position, and we will vigorously defend it."
 Buell said that American consumers will pay for the Commerce Department's action because the duty imposed on Canadian lumber exports would increase lumber costs in the U.S.
 "The Commerce Department's protectionist action is aimed at Canada, but it will also strike American homebuyers who will find themselves paying higher prices for new homes and other products," he said.
 Noting that Canada's share of the U.S. lumber market has declined from 33 percent in 1985 to about 27 percent in recent years, Buell said this demonstrates the absence of injury to the American market, and he expressed confidence the International Trade Commission would find in Canada's favor when it issues its final determination in July.
 Speaking on behalf of the Quebec industry, Gerald Jacques, Quebec's delegate to the Canadian Forest Industries Council, reiterated that the Quebec producers fully support the Canadian position and also intend to fight the issue to the end.
 "The Commerce Department's decision," he declared, "is unfair and unacceptable for all Canadian producers.
 "In addition," said Jacques, "we know full well that our activities have caused no damage to the American forest industry which, in fact, exports saw logs to Quebec."
 -0- 5/15/92
 /CONTACT: Tom Buell, 604-684-0211, or Clare Lynam, 202-457-9270, both for the Canadian Forest Industries Council/ CO: Canadian Forest Industries Council ST: District of Columbia IN: PAP SU:


IH -- DC032 -- 0987 05/15/92 17:29 EDT
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Date:May 15, 1992
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