Canada Uses NAFTA to Dispute Softwood Lumber Duties

Originally published by: CBC NewsNovember 14, 2017

The following article was produced and published by the source linked to above, who is solely responsible for its content. SBC Magazine is publishing this story to raise awareness of information publicly available online and does not verify the accuracy of the author’s claims. As a consequence, SBC cannot vouch for the validity of any facts, claims or opinions made in the article.

Editor’s Note: The following article describes the anticipated next step in the softwood lumber dispute between the U.S. and Canada, a move predicted in our most recent summary of events.

Canada is launching a challenge under the North American Free Trade Agreement against recently announced U.S. duties against Canadian softwood lumber imports.

The Canadian government filed a formal notice on Tuesday of intent to request the establishment of a binational panel under NAFTA to review the U.S. Department of Commerce's recent final determination on countervailing duties on the lumber.

The Commerce Department said on Nov. 2 that it had determined that Canada was providing unfair subsidies to its producers of softwood lumber at rates from 3.34 per cent to 18.19 per cent. It said it would instruct U.S. Customs and Border Protection to collect cash deposits from importers of softwood lumber from Canada based on the final rates. 

The U.S. also imposed anti-dumping duties against Canadian lumber.

Canada said it is requesting the panel under NAFTA's Chapter 19, which deals with reviews and dispute resolution related to countervailing and anti-dumping duties.

"The U.S. Department of Commerce's decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted, and deeply troubling,"  according to a statement issued Tuesday from the office of the foreign affairs minister. 

"As our government has said publicly for some time, we will forcefully defend Canada's softwood lumber industry, including through litigation, which we are launching today," the statement said.

The Commerce Department's determination must still be approved by the U.S. International Trade Commission, which is scheduled to make its final determinations by Dec. 18, 2017. 

If the ITC agrees with the government's decision, the Commerce Department will issue orders to collect the duties. If the ITC finds that U.S. producers were not injured by Canadian softwood imports, the Commerce Department's case will be terminated.

For reference, below are SBC Magazine news articles about the SLA negotiation process published in 2017:

  1. Canadian Officials ‘Optimistic’ After Meeting with U.S. Coalition, January 22, 2017
  2. Lumber History Repeats Itself, and It's Gotten Ugly, February 21, 2017
  3. US Lumber Coalition Criticizes NAHB's Views on Tariff, May 22, 2017
  4. Lumber COALITION Thinks Circumvention Important, SBCA Agrees, June 5, 2017
  5. Softwood Lumber Agreement Needed Before NAFTA Negotiations?, June 12, 2017
  6. Canada Approves $605M to Develop Non-U.S. Lumber Markets, June 12, 2017
  7. Lumber Duties Announced, Optimism for an Agreement?, June 28, 2017
  8. SBCA Summarizes DOC's Extensive Analysis of Trade Actions, July 3, 2017
  9. What is Happening with the 'Handshake SLA'? Who May Stop It?, July 13, 2017
  10. Forestry Analyst Agrees New SLA Possible this Summer, July 17, 2017
  11. ‘Hot Market’ Remains Sticking Point for New Lumber Agreement, August 7, 2017
  12. SLA Trade Talks Continue, European Exports Explode, August 28, 2017
  13. DOC Issues Final Trade Duties on Canadian Softwood Lumber, November 2, 2017