US appeals WTO ruling in lengthy Canada lumber dispute

GENEVA: The United States said Monday it had appealed a World Trade Organization ruling that favoured Canada in a longstanding battle over lumber imports, describing the decision as "deeply flawed".

The WTO's dispute settlement body (DSB) -- long a target of attacks by Washington -- agreed last month with Canada's complaints that Washington had violated trade rules when imposing duties on lumber widely used in construction.

US Trade Representative (USTR) Robert Lighthizer had immediately slammed the decision as "erroneous" and said they "prevent the United States from taking legitimate action in response to Canada's pervasive subsidies for its softwood lumber industry."

And on Monday, the US notified the body of its decision to appeal the panel report, according of a written version of comments made to a DSB meeting.

Filing an appeal before the WTO is tricky, however: the DSB's appellate branch, sometimes called the supreme court of world trade, stopped functioning last December after years of relentless US opposition.

Washington accuses the court of major overreach and has blocked appointments of new judges, leaving it without the quorum needed to hear cases.

By filing an appeal with nowhere for the appeal to be heard, Washington has in effect blocked Canada's ability to move forward and request financial compensation for the US activities deemed illegal by the DSB.

"We are open to discussions with Canada on the way forward in this dispute," a US representative told Monday's meeting.

The DSB report last month upheld most of Ottawa's complaints against the US, saying Washington's claims the government was providing illegal subsidies to lumber producers were based on miscalculated prices and transactions like purchase of electricity that did not qualify as subsidies.

It was the ninth complaint filed by Ottawa over Washington's use of anti-dumping and countervailing duty measures -- long the subject of anger from American trading partners.

In the latest battle in the 40-year-old dispute, the US in 2017 imposed import duties of 18 percent on Canadian softwood lumber imports to compensate for what it said was "dumping" of the product, meaning it was sold below market prices and received government subsidies, thereby hurting US producers.

USTR said imports of softwood lumber products from Canada in 2016 totalled $5.78 billion.