[Federal Register Volume 75, Number 167 (Monday, August 30, 2010)]
[Notices]
[Pages 53014-53015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21486]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. USTR-2010-0015]


Notice and Modification of Action: Canada--Compliance with 
Softwood Lumber Agreement

AGENCY: Office of the United States Trade Representative.

ACTION: Notice and modification of action.

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SUMMARY: Under the 2006 Softwood Lumber Agreement (SLA), Canada agreed 
to impose export measures on Canadian exports of softwood lumber 
products to the United States. At the request of the United States, an 
arbitral tribunal established under the SLA determined in March 2008 
that Canada had breached certain SLA obligations. In February 2009, the 
tribunal issued a remedy award instructing Canada to collect an 
additional 10 percent ad valorem export charge on softwood lumber 
shipments from Ontario, Quebec, Manitoba, and Saskatchewan, until an 
entire amount of CDN $68 million has been collected. Canada did not 
begin collecting the additional export charge. In April 2009, the 
United States Trade Representative (``Trade Representative'') initiated 
an investigation under Section 302 of the Trade Act of 1974, as amended 
(``Trade Act''). In that investigation, the Trade Representative 
determined that Canada's failure to implement the tribunal's remedy 
award had the effect of denying U.S. rights under the SLA; and, 
pursuant to Section 301 of the Trade Act, the Trade Representative 
imposed 10 percent ad valorem duties on imports of softwood lumber 
products subject to the SLA from the provinces of Ontario, Quebec, 
Manitoba, and Saskatchewan (the April 2009 action). Under the April 
2009 action, the duties are to remain in place until such time as the 
United States collects $54.8 million, the U.S. dollar equivalent of CDN 
$68 million at the time. The Government of Canada, however, has now 
adopted its own measures to address Canada's breach of the SLA. In 
particular, Canada will begin collection of an additional 10 percent 
charge on exports of softwood lumber products from the provinces of 
Ontario, Quebec, Manitoba, and Saskatchewan, which will be effective 
with respect to softwood lumber products with a shipment date of 
September 1, 2010 or later. Per an understanding between the 
Governments of the United States and Canada, Canada will collect the 
additional 10 percent charge on exports until the total of the amounts 
collected under the U.S. import duty and the Canadian charge on exports 
is equal to CDN $68 million. The Trade Representative has determined 
that Canada's measures satisfactorily grant the rights of the United 
States under the SLA. Accordingly, the Trade Representative has 
modified the April 2009 action by removing the 10 percent ad valorem 
duties on imports of softwood lumber products subject to the SLA from 
the provinces of Ontario, Quebec, Manitoba, and Saskatchewan, effective 
with respect to imports with a shipment date of September 1, 2010 or 
later.

DATES: The modification of the April 2009 action is effective with 
respect to imports of softwood lumber products subject to the SLA from 
the provinces of Ontario, Quebec, Manitoba, and Saskatchewan with a 
shipment date of September 1, 2010 or later.

FOR FURTHER INFORMATION CONTACT: John Melle, Deputy Assistant USTR for 
the Americas, (202) 395-3412, or Suzanne Garner, Assistant General 
Counsel, (202) 395-9663, for questions concerning the enforcement of 
U.S. rights under the SLA; Heather Sykes, Chief, Trade Policy Branch, 
U.S. Customs and Border Protection, Department of Homeland Security, 
(202) 863-6099, for questions concerning entries of softwood lumber 
products, or William Busis, Chair of the Section 301 Committee and 
Deputy Assistant USTR for Monitoring and Enforcement, (202) 395-3150, 
for questions concerning procedures under Section 301.

SUPPLEMENTARY INFORMATION:

A. Enforcement of U.S. rights under the SLA

    For further information concerning U.S. rights under the SLA and 
the April 2009 action, see Initiation of Section 302 Investigation, 
Determination of Action Under Section 301, and Request for Comments: 
Canada--Compliance With Softwood Lumber Agreement, 74 FR 16,436 (April 
10, 2009) (notice); 74 FR 17,276 (April 14, 2009) (annex).

B. Canada's Measures Addressing the Breach of the SLA

    Canada has adopted measures to comply with the February 2009 remedy 
award by imposing a 10 percent export charge on exports of softwood 
lumber products subject to the SLA from the provinces of Ontario, 
Quebec, Manitoba, and Saskatchewan. Canada enacted the necessary 
legislation, in the form of an amendment to the Softwood Lumber 
Products Export Charge Act, 2006, with parliamentary approval and royal 
assent on July 12, 2010. On August 4, 2010, Canada issued an Order in 
Council setting September 1, 2010 as the date to begin imposing the 10% 
charge on shipments of softwood lumber products from the provinces of 
Ontario, Quebec, Manitoba, and Saskatchewan.
    Per an understanding between the Governments of the United States 
and Canada, Canada will collect the additional 10 percent charge on 
exports until the total of the amounts collected under the U.S. import 
duty and the Canadian charge on exports is equal to CDN $68 million. 
The understanding also provides for the United States and Canada to 
exchange information on the ongoing amounts collected under the U.S. 
import duty and the Canadian charge on exports.

C. Public Comment

    In May 2010, the Section 301 Committee invited comments from 
interested persons with respect to the

[[Page 53015]]

possible modification or termination of the April 2009 action in the 
event the Government of Canada adopted a law imposing an additional 10 
percent export charge on softwood lumber products from the provinces of 
Ontario, Quebec, Manitoba, and Saskatchewan. See 75 FR 30097 (May 28, 
2010).

D. Modification of April 2009 Action

    Section 307 of the Trade Act authorizes the Trade Representative to 
modify or terminate an action taken under Section 301 if, among other 
things, ``the foreign country is taking satisfactory measures to grant 
the rights of the United States under a trade agreement.'' Sections 
301(a)(2)(B)(i) and 307(1)(A). Pursuant to the recommendations of the 
Trade Policy Staff Committee and the Section 301 Committee, and taking 
account of the comments received in response to the May 2010 notice, 
the Trade Representative has determined: (1) That Canada's adoption of 
the July 2010 amendment to the Softwood Lumber Products Export Charge 
Act, 2006, and the August 2010 Order in Council constitute 
``satisfactory measures''; and (2) to modify the April 2009 action by 
removing the 10% import duty on entries of softwood lumber products 
from the provinces of Ontario, Quebec, Manitoba, and Saskatchewan with 
a shipment date of September 1, 2010 or later. In order to prevent any 
gap in collection of the charge, the 10% import duty will continue to 
apply to entries after September 1, 2010 with a shipment date of August 
31, 2010 or earlier.
    In accordance with the Trade Representative's determination to 
modify the April 2009 action, and effective with respect to articles 
entered, or withdrawn from warehouse for consumption, on or after 
September 1, 2010, U.S. Note 13 to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States (HTS) is modified by 
deleting subdivision (i) and inserting the following new subdivision in 
lieu thereof:

    ``(i) The additional duties provided for in subheading 
9903.53.01 shall apply to articles entered, or withdrawn from 
warehouse for consumption, on or after September 1, 2010, if the 
Canadian export permits associated with the entries display a 
shipment date prior to September 1, 2010. The additional duties 
provided for in subheading 9903.53.01 shall not apply to articles 
entered, or withdrawn from warehouse for consumption, on or after 
September 1, 2010, if the Canadian export permits associated with 
the entries display a shipment date of September 1, 2010 or later.''

E. Section 306 Monitoring

    Pursuant to Section 306(a) of the Trade Act, the Trade 
Representative will continue to monitor the implementation of Canada's 
measures imposing a 10 percent export charge on exports of softwood 
lumber products subject to the SLA from the provinces of Ontario, 
Quebec, Manitoba, and Saskatchewan. Pursuant to Section 306(b), if the 
Trade Representative considers that Canada is not satisfactorily 
implementing these measures, the Trade Representative will determine 
what further action to take under Section 301.

William L. Busis,
Chair, Section 301 Committee.
[FR Doc. 2010-21486 Filed 8-27-10; 8:45 am]
BILLING CODE 3190-W0-P