OTTAWA, Feb 10 (AFP): Canada said late Wednesday it will ask the World Trade Organisation to allow it to impose 4.1 billion dollars (3.3 billion US dollars) in sanctions on US products in retaliation for US duties on Canadian lumber.
The organisation ruled last year that US duties on Canadian softwood exports violated global trade rules.
"The US International Trade Commission's threat-of-injury determination of November 24, 2004, relies on the same faulty analysis that was found to be WTO-inconsistent by the original WTO panel," International Trade Minister Jim Peterson said in a statement.
The US Department of Commerce, he continued, should then have revoked the anti-dumping and countervailing duty orders, and should have instructed US Customs to refund all of the softwood lumber cash deposits.
"The US failure to comply with the WTO ruling has forced Canada to take the steps necessary to protect its rights under the WTO," Peterson said.
Canada plans to challenge the US approach before a WTO compliance panel on February 14.
Washington claims Canadian softwood lumber is subsidised and that an alleged flood of Canadian imports has hurt the United States.
The 20-year-old US-Canada softwood dispute reemerged in 2001 after the expiration of a trade deal.
A US anti-dumping investigation resulted in Washington imposing duties ranging from 2.18 per cent to 12.44 per cent on Canadian softwood products in April 2002.
Meanwhile, another report says: A group of major farming nations at the WTO warned the European Union Wednesday that its decision to re-introduce export refunds on wheat this month undermined global trade talks underway in Geneva.
The Cairns group, which includes 17 mainly Austral-Asian and Latin American countries, said the refund scheme amounted to an export subsidy and protested the EU move during talks at the WTO on liberalising agriculture.
"The EU's reversal of direction on export refunds sends a poor signal at a time when leadership from the major WTO members is critical to moving the negotiations forward," the Cairns Group said in a statement.
"It would be unfortunate if the recent decision were to suggest a weakening of EU commitment to reform of the Common Agricultural Policy and to eliminate export subsidies," it added.
France's agriculture ministry announced on January 21 that the European Commission had accepted a French request to open the refund scheme this month.
The move was aimed at "improving the competitiveness of French cereal" on world markets following months of depreciation of the dollar against the euro, the French ministry added.
It also cited competition from Ukraine, Russia and Argentina, a Cairns member.
Refunds allow the EU to compensate farmers for the difference between world prices on global markets and those in Europe.
The Australian official said the size of the EU refund this month was relatively small, but raised concerns about a possible "new wave" of export subsidies from the now 25-nation trading bloc.
The issue was raised with the EU trade and agriculture commissioners during a meeting of some WTO ministers in the Swiss resort of Davos two weeks ago.
But it was brought up again with the rest of the 148 WTO members in an informal meeting with the WTO director general Supachai Panitchpakdi about the trade talks on Tuesday, Spencer said.
Other countries have also warned that "extraneous" disputes could sour the the talks, diplomats said. Honduras had raised concerns about planned new EU import tariffs on bananas.
The Cairns Group and developing countries have been pitted against rich nations, notably the EU and United States, on the issue of subsidies during the round of trade talks launched in the Qatari capital, Doha, in 2001.
Cairns members and some subsidising countries were at odds during negotiations on the key agricultural segment of the Doha round in Geneva earlier this week on several issues, including levels of cuts in domestic support, trade sources said.