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Preliminary Affirmative Determination of Critical Circumstances:
Certain Softwood Lumber Products from Canada

On Friday, August 10, 2001, the Department of Commerce will announce its preliminary affirmative determination of critical circumstances on certain softwood lumber products from Canada.

BACKGROUND
On April 2, 2001, the Department of Commerce ("the Department") received a petition filed in proper form by the Coalition for Fair Lumber Imports Executive Committee ("petitioner") alleging that, following the March 31, 2001 expiration of the U.S.-Canada Softwood Lumber Agreement ("SLA"), there was a reasonable basis to believe or suspect that critical circumstances will exist with regard to imports of lumber from Canada.

The petitioner requested that the Department monitor import data regarding the subject merchandise to determine whether imports surged following the filing of the petition. On April 3, 2001, Secretary Evans announced that the Department would institute a Lumber Import Monitoring Program to track imports of softwood lumber for signs of a possible surge.

The Department will make a final critical circumstances determination at the time of our final countervailing duty determination, which is currently scheduled for October 23, 2001.

Critical Circumstances:
The critical circumstances provisions of the countervailing duty laws ensure that the statutory remedies against unfairly traded imports are not undermined by massive imports of subsidized merchandise that are triggered by the investigation and come in before the remedial duties take effect. If critical circumstances are found, countervailing duties may be assessed retroactively on goods imported up to 90 days prior to the publication of the Department's preliminary countervailing duty determination (approximately mid-May).

In order to make an affirmative finding of critical circumstances, the Department must find that (1) there are alleged countervailable subsidy programs that are inconsistent with the WTO Agreement on Subsidies and Countervailable Measures ("the WTO Agreement"), and (2) there have been massive imports of lumber from Canada over a relatively short period (more than 15 percent).

We preliminarily find that, based on petitioner's allegations and the information available to us at this time, there are subsidy programs investigated by the Department that are inconsistent with the WTO Agreement. We also found that imports surged more than 15 percent when comparing seasonally adjusted 2nd quarter 2001 import statistics with 1st quarter 2001 import statistics.


PRODUCT DESCRIPTION
The products covered by this investigation are softwood lumber, flooring and siding (softwood lumber products). Softwood lumber products include all products classified under item numbers 4407.10.00, 4409.10.10, 4409.10.90, and 4409.10.20, respectively, of the HTSUS. These softwood lumber products include:

(1) coniferous wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding six millimeters;

(2) coniferous wood siding (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed;

(3) other coniferous wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges or faces (other than wood mouldings and wood dowel rods) whether or not planed, sanded or finger-jointed; and

(4) coniferous wood flooring (including strips and friezes for parquet flooring,
not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed.

Although the HTSUS subheadings are provided for convenience and U.S. Customs purposes, the written description of the merchandise under investigation is dispositive.

Excluded from this investigation are imports of softwood lumber from the Canadian Provinces of New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland (the Maritime Provinces). This exemption does not apply to softwood lumber products produced in the Maritime Provinces from Crown timber harvested in any other Province.

CASE CALENDARS

ACTION AD CVD
Petition Filed April 2, 2001 April 2, 2001
DOC Initiation April 23, 2001 April 23, 2001
ITC Preliminary Determination May 17, 2001 May 17, 2001
DOC Preliminary Determination Sept. 24, 2001 August 9, 2001
DOC Final Determination * Dec. 8, 2001 Oct. 23, 2001
ITC Final Determination Jan. 22, 2002 Dec. 7, 2001
DOC Issues Orders (If warranted) Jan. 29, 2002 Dec. 14, 2001

* U.S. law allows these dates to be extended

If DOC makes affirmative final determinations, the ITC must make final injury determinations within 45 days. If those determinations are affirmative, DOC will issue antidumping and countervailing duty orders.


WEB SITE ADDRESS:

By Monday, August 13, the Department will post its preliminary determination on the Import Administration web site at the following address: www.ia.ita.doc.gov

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