[Federal Register Volume 66, Number 149 (Thursday, August 2, 2001)]
[Notices]
[Pages 40228-40229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19345]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-122-839]


Amendment to the Notice of Initiation of Countervailing Duty 
Investigation: Certain Softwood Lumber Products From Canada

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of amendment to initiation of countervailing duty 
investigation.

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SUMMARY: The Department of Commerce (the Department) is amending its 
notice of initiation of a countervailing duty investigation of certain 
softwood lumber products from Canada to exempt the Provinces of New 
Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland (the 
Maritime Provinces) from the investigation. This exemption does not 
apply to certain softwood lumber products produced in the Maritime 
Provinces from Crown timber harvested in any other Province.

EFFECTIVE DATE: August 2, 2001.

FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds at (202) 482-6071 or 
Maria MacKay at (202) 482-1775, Office of AD/CVD Enforcement VI, Group 
II, Import Administration, International Trade Administration, U.S. 
Department of Commerce, Room 1870, 14th Street and Constitution Avenue, 
N.W., Washington, D.C. 20230.

Background

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are references 
to the provisions codified at 19 CFR Part 351 (2001).

ACTIONS SINCE INITIATION: On April 30, 2001, the Department published 
in the Federal Register the ``Notice of Initiation of Countervailing 
Duty Investigation: Certain Softwood Lumber Products from Canada'' (66 
FR 21332) (Notice of Initiation). In the Notice of Initiation, the 
Department did not exempt the Maritime Provinces from this 
investigation. However, the Department noted the possibility of 
addressing the unique circumstances associated with the Maritime 
Provinces through an exclusion process. The Department invited comments 
from interested parties concerning exclusions and how to address the 
unique circumstances of the Maritime Provinces. Initial comments were 
due by May 15, 2001, and several rounds of rebuttal comments were 
submitted in subsequent weeks.
    In the comments submitted to the Department, parties argued that, 
consistent with the petition, the Department should have exempted 
certain lumber produced in the Maritime Provinces from the scope of the 
investigation. Specifically, petitioners asserted that the Department 
should have exempted the Maritime Provinces from the investigation. In 
a subsequent submission, petitioners requested that the Department 
amend the Notice of Initiation to exempt the Maritime Provinces from 
the investigation. The Maritime Provinces, the Maritime Lumber Bureau 
of Canada, and at least one company located in the Maritime Provinces 
also requested that the Department reconsider its decision to include 
the Maritime Provinces in the investigation. Additionally, the 
Government of Canada, in pre-initiation consultations with the 
Department, supported exempting the Maritime Provinces from the 
investigation.

ANALYSIS: We have reconsidered the status of the Maritime Provinces in 
this investigation. Based on all of the comments submitted, we agree 
with the views expressed by the interested parties that, given the 
unique circumstances associated with the investigation of softwood 
lumber from Canada, as described below, the Department should exempt 
certain lumber produced in the Maritime Provinces from the scope of the 
investigation. In reaching this decision, we were guided by the long 
history of trade cases and trade agreements regarding softwood lumber.
    The courts have long recognized that, generally, the statute 
accords the Department broad discretion in the enforcement of the 
antidumping and countervailing duty laws. Daewoo Elecs. Co. v. 
International Union, 6 F.3d 1511, 1516 (Fed. Cir. 1993), cert denied, 
512 U.S. 1204 (1994). More specifically, the courts have acknowledged 
that the Department has the inherent authority to define the parameters 
of an investigation. Duferco Steel, Inc. v. U.S., 2110 CIT LEXIS 64 
(May 29, 2001); Mitsubishi Heavy Industries, Ltd. v. U.S., 986 F. Supp. 
1428, 1432 (CIT 1997). Nevertheless, the purpose of the antidumping and 
countervailing duty laws is to provide the relief sought in the 
petition, if the allegations in the petition are borne out through 
investigation. Thus, while the Department has broad discretion to 
define an investigation, that discretion must be exercised reasonably 
and with ample deference to the intent of the petition.
    Upon reconsideration, we have concluded that, even though the exact 
circumstances surrounding the exemption of the Maritimes from the 1991 
investigation are not present in this case, there are still unique

[[Page 40229]]

circumstances, discussed in the amendment below, that warrant exempting 
the Maritime Provinces from this investigation. In fact, the 
circumstances behind the original exemption of the Maritimes from the 
1986 Memorandum of Understanding (1986 MOU) have not changed for the 
last 15 years. Even though the exemption of the Maritimes from the 1991 
countervailing duty investigation was based on a separate legal 
requirement (see, Self-Initiation of Countervailing Duty Investigation: 
Certain Softwood Lumber Products from Canada, 56 FR 56055, 56058 
(October 31, 1991) and Amendment to the Notice of Self-Initiation of 
Countervailing Duty Investigation: Certain Softwood Lumber Products 
from Canada, 56 FR 56058 (October 31, 1991)), the circumstances 
associated with the Maritime Provinces are substantially the same as 
they were at the time of the 1986 MOU. Those circumstances remained the 
same at the time of the 1991 countervailing duty investigation, the 
1996 Softwood Lumber Agreement, and at present with respect to the 
current investigation. Accordingly, the Department is amending the 
Notice of Initiation to exempt the Maritime Provinces.

Amendment

    The Notice of Initiation is amended to add the following paragraph 
entitled ``Exemption of Maritime Provinces'':

Exemption of Maritime Provinces

    The lumber dispute between Canada and the United States has a long 
history. Throughout much of the history of this dispute, the Maritime 
Provinces have been exempt from the various actions taken, including 
the 1986 Memorandum of Understanding on Softwood Lumber, the interim 
measures taken pursuant to Section 301 of the Trade Act of 1974, the 
1991 countervailing duty investigation, and the recently expired 
Softwood Lumber Agreement. All parties have generally recognized that 
there are unique circumstances associated with the Maritime Provinces 
and have supported those exemptions. That is equally true in the case 
now before us. In the petition, petitioners requested that softwood 
lumber production in the Maritime Provinces be exempt as it was in the 
1991 countervailing duty investigation. Further, petitioners did not 
allege that any subsidies are received by producers in the Maritime 
Provinces. While the absence of allegations regarding specific regions 
of a country would not be sufficient by itself to warrant the exemption 
of those regions from an investigation, this factor, when combined with 
all the other unique circumstances of the Maritimes, does contribute to 
our determination to exempt the Maritimes. The Government of Canada 
also supported exemption of the Maritime Provinces from the 
investigation given the absence of subsidy allegations.
    In light of all of the unique circumstances in this case, we have 
determined that it is appropriate to exempt exports of certain softwood 
lumber products produced in the Maritime Provinces from this 
investigation. As in the earlier proceedings and agreements concerning 
softwood lumber, this exemption does not apply to certain softwood 
lumber products produced in the Maritime Provinces from Crown timber 
harvested in any other Province.

    Dated: July 27, 2001.
Faryar Shirzad,
Assistant Secretary, Import Administration.
[FR Doc. 01-19345 Filed 8-1-01; 8:45 am]
BILLING CODE 3510-DS-P