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Canada had asked the WTO for permission to retaliate. Jacqueline LaRocque, a spokeswoman for Canadian Trade Minister Jim Peterson, said that Canada is considering imposing C$5 billion in duties on imports from the U.S. in retaliation. "Canada has wanted to make it very clear that we are not happy with the position of the United States to simply ignore what is a clear NAFTA ruling in Canada's favor," Canadaian Finance Minister Ralph Goodale was quoted as saying.

The U.S. is still dealing with a 4 billion dollar ruling against it by the WTO relating to its practice of helping large American companies set up "Foreign Sales Corporations" offshore in order to have a competative edge in Europe. That dispute resulted in the U.S. having to change its laws last year.

Sources

• "Canada mulls duties on U.S. goods in softwood row." Reuters, August 23, 2005
  
• AP "Canada hints at trade war with U.S." CNN, August 23, 2005
  
• Public Affairs Office, United States Mission to the European Union "FOREIGN SALES CORPORATION." United States Mission to the European Union, October 22, 2004