Canada says corn not fodder for U.S. lumber fight

REGINA, Saskatchewan (Reuters) – Canada has not linked its
trade fight with the United States over softwood lumber to a
potential battle between the countries over corn, the Trade
Minister said on Wednesday.

“Absolutely not, there is no linkage between the two,” Jim
Peterson said, dismissing a media report that Ottawa was eyeing
punitive duties on U.S. corn imports to retaliate for U.S.
duties on Canadian lumber.

Ontario corn farmers have become increasingly upset over
imports of cheap U.S. corn to produce ethanol, and there have
been suggestions of filing a complaint to the World Trade
Organization.

Peterson said he believes the corn producers have had
preliminary discussions about asking Ottawa to pursue a trade
complaint, but they have not made a final decision.

“We would be open to representations from the corn sector.
Our doors are open to them,” Peterson said in Regina, where the
federal Liberal Party is holding its caucus.

Representatives of the Ontario Corn Producers Association
were not immediately available for comment on Wednesday.

Manitoba corn growers filed anti-dumping and countervailing
duty action against the U.S. in 2000, but the Canadian
International Trade Tribunal ruled there was not enough injury
to enough of Canada’s corn producers for the duty to hold.

Canadian officials have raised the specter of trade
retaliation against the United States as they press to end U.S.
duties on the lumber used in construction and for a refund of
more than $4 billion already paid by Canada’s forestry firms.

Canada says a ruling this month by a NAFTA panel showed the
duties are not legal, but the United States has argued Ottawa’s
interpretation of the decision is wrong.

Canada would need the World Trade Organization’s approval
to file sanctions, and if they receive the WTO’s blessing the
earliest they could be imposed is mid-2006.