Canada launches NAFTA challenge against United States lumber duties

Marco Green
November 15, 2017

The federal government today filed a request to have a NAFTA dispute panel examine the countervailing duties the US imposed on nearly all softwood lumber imports from Canada earlier this year.

Industry observers say part of the reason behind the lack of progress in renegotiating NAFTA has been Canada's backing for the Chapter 19 appeal process - a position that clashes with the Trump administration's push to abolish that dispute-resolution mechanism.

Shipping Canadian softwood south of the border is technically a bilateral matter between Canada and the United States. The ministry went on to say that the tariffs on Canadian lumber exports into the USA were "unfair, unwarranted and deeply troubling". If the ITC finds that USA producers were not injured by Canadian softwood imports, the Commerce Department's case will be terminated.

The reduction in tariff rates came as cold comfort to Canadian producers, which had been hoping for a breakthrough softwood deal.

"We will forcefully defend Canada's softwood lumber industry, including through litigation, which we are launching today", Canada's foreign ministry said in a statement.

The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes.

The U.S. Commerce Department said Canada subsidizes its lumber because the Canadian provinces own most of the forested land from which the timber is cut, while the American forests are predominately privately held.

The new anti-dumping rate kicked in on November 8.

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 December 18, 2017.

Other reports by Click Lancashire

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