Canada Plans to Fight WTO Softwood Lumber Ruling

Editor's Note: The article and video below summarize the latest development in the softwood lumber trade dispute between the U.S. and Canada.  For a brief summary and timeline of this long-standing trade issue, please read this article. Additional background articles on this topic can be found at the bottom of the page.

Canada will appeal last week’s decision by the World Trade Organization (WTO) which ruled to allow the United States to use “zeroing” to calculate anti-dumping tariffs, Foreign Minister Chrystia Freeland said in a statement on Monday.

“We firmly believe that the U.S. duties on Canadian softwood lumber are unfair and unwarranted,” Foreign Minister Chrystia Freeland said in a statement. “That is why we are challenging these duties at the WTO and under NAFTA.”

Canada had launched the technical dispute with the WTO in 2017, saying it would forcefully defend its lumber industry, but last week’s long-awaited decision sided with the United States.

The United States had suffered a string of defeats at the WTO over zeroing, a calculation method that was ruled to have unfairly increased the level of U.S. anti-dumping duties.

The U.S. Commerce Department had accused Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in home construction. Its duties affected about $5.66 billion worth of imports.

WATCH: Trump claims WTO has not treated U.S. ‘fairly’ due to members abusing trade rules (Nov. 2018) 

Trade tensions between the United States and Canada are heating up again after the two countries together with Mexico signed a free-trade agreement to replace NAFTA last year.

Last week, Canada said it was looking at ways to boost the effectiveness of its retaliatory tariffs against the United States.

Canada imposed tariffs on C$16.6 billion ($12.5 billion)worth of U.S. exports in May 2018 after Washington slapped punitive measures on exports of Canadian steel and aluminum. The initial Canadian list included orange juice, maple syrup, whiskey, toilet paper and a wide variety of other products.

For more information on the softwood lumber dispute, please read these articles by SBC Magazine:

1. Stage Set for Costly Softwood Lumber Trade Battle Oct 17, 2016
2. US Lumber Coalition Files Trade Duty Petition with DOC Dec 5, 2016
3. Canadian Officials ‘Optimistic’ After Meeting with U.S. Coalition, Jan 22, 2017
4. Lumber History Repeats Itself, and It's Gotten Ugly, Feb 21, 2017
5. US Lumber Coalition Criticizes NAHB's Views on Tariff, May 22, 2017
6. Lumber COALITION Thinks Circumvention Important, SBCA Agrees, Jun 5, 2017
7. SBCA Requests DOC Hearing on Softwood Lumber Trade Dispute Jun 5, 2017
8. Softwood Lumber Agreement Needed Before NAFTA Negotiations?, Jun 12, 2017
9. Canada Approves $605M to Develop Non-U.S. Lumber Markets, Jun 12, 2017
10. Lumber Duties Announced, Optimism for an Agreement?, Jun 28, 2017
11. SBCA Summarizes DOC's Extensive Analysis of Trade Actions, Jul 3, 2017
12. What is Happening with the 'Handshake SLA'? Who May Stop It?, Jul 13, 2017
13. Forestry Analyst Agrees New SLA Possible this Summer, Jul 17, 2017
14. ‘Hot Market’ Remains Sticking Point for New Lumber Agreement, Aug 7, 2017
15. SLA Trade Talks Continue, European Exports Explode, Aug 28, 2017
16. DOC Issues Final Trade Duties on Canadian Softwood Lumber, Nov 2, 2017
17. Sorting Through Media Reports on Softwood Lumber Tariff May 1, 2017
18. Lumber History Repeats Itself, and It's Gotten Ugly Feb 21, 2017
19. Lumber Market has Gone Emotional – Nothing Good Comes of This Feb 27, 2017
20. Why Lumber Costs Continue to Rise and What to Do April 10, 2017
21. Canada Uses NAFTA to Dispute Softwood Lumber Duties Nov 20, 2017
22. Softwood Lumber Costs Reach Record Highs Thanks to Duties? Nov 20, 2017
23. Canada Files Softwood Lumber Trade Suit with WTO Dec 2, 2017