Taxes Or Duties On Imports

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Oct 07, 2002

Taxes Or Duties On Imports

GENEVA (AP) ? The World Trade Organization agreed to investigate claims that the United States is acting illegally by imposing special taxes or duties on imports of orange juice and lumber.

Panels of trade experts will look into the two cases, the organization's Dispute Settlement Body decided. Rulings usually take about a year.

Brazil complained about a tax imposed by the state of Florida on orange and grapefruit juice, which it said was illegal because it is not applied to juice produced in the state.

For 32 years, Florida has taxed imported orange juice concentrate, which is added to Florida orange juice to improve its color and make up for supply shortfalls. The current rate is about 3 cents per gallon.

Foreign citrus producers like Costa Rica, Mexico and Brazil are required to pay the tax, while domestic producers have been exempt. Following a court ruling in July, the state started imposing the tax on other U.S. states that produce juice used in making Florida orange juice, including California, Arizona and Texas, but still exempted Florida producers.

Brazil complained that the tax was unfair, since proceeds from the tax have been used to pay for ads promoting Florida orange juice over imported brands.

In a separate dispute, Canada complained about U.S. duties averaging 27 percent imposed on imports of softwood lumber on May 22.

Most U.S. timber is harvested from private land at market prices, while in Canada the government owns 90 percent of timberlands and charges fees, called stumpage, for logging. The fee is based on the cost of maintaining and restoring the forest.

U.S. timber companies contend that Canada's fees are artificially low and amount to subsidies that allow Canadian mills to sell wood below market value.

WTO panel ruled broadly in favor of Canada in a linked case, saying that the United States used incorrect methodology when it earlier imposed emergency duties on imports.

Softwood exports to the United States have plunged by an average 25 percent since the tariffs were imposed, Canadians say, forcing mills across the country to lay off thousands of workers.

Last year the United States imported from Canada about $6 billion, or one-third, of its softwood lumber, which is used to frame and remodel houses.

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