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CANADIAN GOVERNMENTS, LUMBER INDUSTRY URGE PANEL TO REJECT INJURY FINDING IN LUMBER CASE

 WASHINGTON, Dec. 22 /PRNewswire/ -- Canadian governments and the Canadian lumber industry today urged a binational panel to reject the International Trade Commission's determination that imports of Canadian softwood lumber are injuring the U.S. lumber industry.
 In a 175-page brief filed today, the federal government of Canada, certain provinces, the Canadian Forest Industries Council (CFIC) and representatives of the Quebec lumber industry said that because there is no evidence to support the ITC's final determination, the panel should remand the determination and instruct the ITC to correct its "serious deficiencies."
 By a vote of 4-2, the ITC determined in June that Canadian softwood lumber exports were injuring U.S. lumber manufacturers during the period of investigation. One of the dissenters, ITC Commissioner Janet Nuzum, noted at the time that "the record does not support a determination of present injury." Earlier in the year, the U.S. Department of Commerce determined that several provincial programs provided subsidies and calculated a countervailable duty rate of 6.51 percent.
 Canada is appealing both decisions to binational panels under Chapter 19 of the U.S.-Canada Free Trade Agreement.
 The ITC binational panel, like the Commerce binational panel, does not have the authority to reverse the earlier decision. However, according to Tom Buell, chairman of CFIC, once the ITC takes all the facts into consideration, it will not be able to find injury, and the case will be dropped.
 "Despite a complete lack of evidence -- acknowledged publicly by one of the commissioners -- the ITC ruled against Canada," Buell said. "But when the unbiased panel has completed its work, I'm confident it will support our position that there was no justification for a finding of injury."
 The brief said the ITC's affirmative determination failed to address Canada's key arguments and evidence; selectively used evidence provided by the U.S. industry; failed to address central issues; and improperly relied on evidence which was not on the record.
 While the United States maintained that Canada's imports allegedly suppressed domestic lumber prices during the period of investigation, the brief noted that lumber prices actually rose during that time, according to the ITC's own data. The Canadian market share also declined, and Canada's import volumes, which have fallen steadily since 1987, declined by more than 15 percent.
 Since the ITC lacked any evidence of injurious Canadian pricing, the brief said it was forced to rely on a "theory" of price suppression inconsistent with, and unsubstantiated by, the facts on the record to determine injury. The theory, which relies on unsupported assertions about the softwood lumber market, also contradicts several legal principles.
 The ITC analysis of price suppression "boils down to nothing more than the unsubstantiated assumption that the presence of any amount of imports will invariably suppress prices ... therefore, the causal link between imports and price suppression can be presumed," the brief said. "Yet, prior Chapter 19 panels and the Court of International Trade have categorically rejected the notion that price suppression can be presumed without the support of record evidence."
 The brief said it was even "more remarkable" that injury was found in this case given the overwhelming record evidence -- ignored by the ITC -- demonstrating that the dramatic decline in lumber demand and increasing constraints on timber supplies entirely explained the condition of the domestic industry over the period of review.
 Oral arguments on the brief filed today will be held in April. The injury binational panel is expected to announce its decision in June 1993.
 -0- 12/22/92 R
 /CONTACT: Clare Lynam for the Canadian Forest Industries Council, 202-457-6382/


CO: Canadian Forest Industries Council ST: District of Columbia IN: PAP SU:

DC -- DC021R -- 9360 12/22/92 18:31 EST
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Date:Dec 22, 1992
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