In one fell swoop the us has dealt a crippling blow to the Canadian lumber industry, slapping a 27 per cent duty on softwood timber imports from the country. The us salvo is the latest move in a protracted dispute spanning almost 20 years. Its significance for Canada can be gauged from the fact that softwood exports from the country account for approximately us $10 billion annually - a third of the us lumber market.

The decision is the culmination of a year-long investigation by the us department of commerce which found that Canadian timber harvested from government-owned forestland was priced low, thus creating an unfair market. Thereafter, the us International Trade Commission unanimously agreed that cheap timber import from Canada was affecting the us industry and imposed countervailing and anti-dumping duties on softwood lumber with effect from May 23, 2002. Under the Canadian licensing system, companies pay a fee for harvesting government-owned timber. These