Imposing a countervailing duty on imports of plywood

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Reference no: EM131768567

Question: State C is a major exporter of lumber products (especially plywood) to State U. State C's lumber companies are able to manufacture and sell their products in State U inexpensively because (unlike State U) State C's government charges only a nominal fee for cutting lumber in its national forests. In State U, on the other hand, the cutting fee is substantial, adding 15-20 percent to the cost of the finished lumber product. One of State U's plywood lumber companies, Multi-Ply, Inc., has lost much of its market share in State U due to imports from State C. Multi-Ply has complained to State U's government, arguing that State C is unfairly subsidizing its lumber companies by charging such a low forest-cutting fee. Multi-Ply would like State U's government to impose a countervailing duty on imports of plywood from State C. May State U do so? Note that both State C and State U are members of the WTO. Discuss.

Reference no: EM131768567

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