Softwood Lumber Decision by World Trade Organization Step Forward for Canada

First Nations Trainees Impress Tigercat Reps in Ogoki Forest
First Nations Trainees Impress Tigercat Reps in Ogoki Forest

THUNDER BAY – BUSINESS – The World Trade Organization has released its final report on the softwood lumber dispute between Canada and the United States. The WTO found that in 16 of the 19 claims raised, the panel was in favour of Canada. This includes issues such as the U.S. Department of Commerce’s (USDOC) not considering relevant information submitted by provinces and not making appropriate adjustments to consider their specific market conditions.

The report comes after the USDOC imposed both countervailing and anti-dumping tariffs on Canadian softwood lumber exports to the U.S. in April 2017. Canada, with the support of the provinces and industry, including Alberta’s government and the Alberta Forest Products Association, initiated the WTO challenge of the countervailing duty determination in November 2017.

Mary Ng, Minister of Small Business, Export Promotion and International Trade says, “The Government of Canada welcomes the unanimous WTO panel ruling that U.S. countervailing duties against Canadian softwood lumber are inconsistent with the WTO obligations of the United States. Canada’s forestry sector supports hundreds of thousands of good, middle-class jobs for hard-working Canadians in communities across our country, and we will always stand up for them.

“Canada remains unequivocal: U.S. duties on Canadian softwood lumber are completely unwarranted and unfair. This decision confirms that. Canada does not subsidize its softwood lumber industry, and that is why we have challenged these U.S. duties at the WTO and under the former North American Free Trade Agreement. Canada expects the United States to comply with its WTO obligations. U.S. duties on Canadian softwood lumber must not persist. They have caused unjustified harm to Canadian industry and U.S. consumers alike. U.S. homebuilders rely on Canadian lumber, and the current record-high lumber prices are hurting the economic recovery in both countries. Right now, during these difficult times, businesses and people in both our countries need support, not the burden of additional taxes.”

John Yakabuski, Minister of Natural Resources and Forestry, and Vic Fedeli, Minister of Economic Development, Job Creation and Trade, issued the following statement in response to the World Trade Organization (WTO) panel’s decision:

“Ontario welcomes the decision made by the WTO panel that the countervailing duties the U.S. placed on Canadian lumber exports violate the U.S.’s WTO trade obligations.

This is an important step in ensuring the ongoing success of our forestry industries, which play an important part in our economy. As we move towards economic recovery, it has never been more important to vigorously defend and encourage this sector.

We believe fair and open trade is the best outcome for consumers on both sides of the border, and Ontario families who rely on our forest industry are being hurt by these unfair actions. By ruling strongly in our favour, the WTO has reaffirmed our position that U.S. duties on our lumber are unjustified.

We will continue to work closely with the industry, the provinces and the federal government, and use all available avenues to fight unfair duties on Canadian softwood lumber.”

Lumber stacked at Mission Sawmill in Thunder Bay Ontario
Lumber stacked at Mission Sawmill in Thunder Bay Ontario

“Now is the time to settle a dispute that has denied fair access to the U.S. market,” says Jeff Bromley, Chair of the USW Wood Council, representing 14,000 forest industry workers across Canada. “It is reassuring to see that the WTO agreed with almost all aspects of Canada’s appeal. We have always maintained that softwood lumber duties are based on erroneous logic and that the U.S. refuses to understand how the Canadian industry operates,” said Bromley.

The report is not looked on as favourably south of the Canada US Border.

U.S. Lumber Coalition Executive Director Zoltan van Heyningen states that “The WTO panel with this report, like other WTO Appellate Body and panel reports, has added to U.S. obligations and diminished U.S. rights, addressing issues it has no authority to address, taking actions it has no authority to take, and interpreting WTO agreements in ways not envisioned by the WTO Members who entered into those agreements.”

“While this decision is not binding upon the United States, and thus has no immediate effect on the ongoing Commerce Department proceedings, these deeply flawed WTO panel reports undermine the credibility of the entire WTO system and are harmful to U.S. workers and their communities who depend on the full and effective enforcement of the U.S. trade laws,” added U.S. Lumber Coalition CoChair Jason Brochu.

“The U.S. government must reject this blatant attempt by a WTO panel to diminish U.S. rights and the panel’s attempt to deviate and expand from original WTO obligations,” said Brochu.

Concluded Brochu, “the U.S. Lumber Coalition deeply appreciates the efforts by the United States Trade Representative (USTR) to combat the judicial activism of the WTO and strongly supports USTR’s demands for systemic changes to the WTO dispute settlement system.”