11 May 1999

Canadian Lumber Industry Wins at World Customs Organization

In a 21-1 decision, a committee of the World Customs Organization (WCO) ruled on 10 May that the United States broke international tariff rules when it unilaterally reclassified pre-drilled Canadian lumber last year. The ruling hits trade worth as much as $300 million (USD) a year.

Canadian officials are reviewing the WCO recommendation to see what can be done to ensure US compliance with the ruling. The US can delay application of the decision by filing a reservation with the WCO.

Last year, US Customs revoked the duty-free status of pre-drilled stud lumber. The Washington-based US Coalition for Fair Lumber Imports maintains that Canadian companies have been trying to get around the Canada-US Lumber Agreement by making minor modifications to the wood, such as drilling holes, planing or notching. The Canadian argument is that this additional milling turns ordinary lumber into specialized products.