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Issue #584 | Breakbulk Quarterly

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2014 Media Kit
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US appeals WTO ruling in Canadian lumber dispute

By: | at 08:00 PM | Channel(s): International Trade  

The United States appealed a World Trade Organization panel ruling on Sept. 6 against US duties on Canadian softwood lumber, and it called for renewed negotiations to resolve the long-running dispute.

The WTO case is one of several Ottawa filed after Washington slapped duties on Canadian softwood lumber in March 2002 to offset alleged subsidies and unfair pricing.

Since then, both sides have been able to claim some victories in various cases heard by WTO or North American Free Trade Agreement dispute panels, but Canada has shown little interest in resuming negotiations.

The latest appeal stemmed from a WTO panel report released on Aug. 1 which found fault with how the United States had implemented a previous ruling against US countervailing duties on Canadian lumber, a spokeswoman for the US Trade Representative’s office said.

The case also concerned how the United States calculates Canadian government subsidies when logs are sold from one Canadian producer to another, the spokeswoman said.

The dispute has strained trade relations between the United States and Canada.

Ottawa reacted angrily when Washington refused to scrap its lumber duties after a NAFTA panel ruled against them on Aug. 10. However, a few weeks later, the WTO backed US claims that imports of Canadian lumber threatened the US industry.

The United States argues the only way to resolve the dispute once and for all is through negotiation.

“Litigation has obviously not proved to be an effective way to resolve this relatively small but highly disruptive agreement,” US Trade Representative Rob Portman said in an op-ed piece in Canada’s Globe and Mail newspaper.

“Canada’s recent decision to cancel negotiations was unfortunate, particularly given that progress was being made,” Portman said. “We are still waiting to see the Canadian counterproposal (to a US proposal made in July). We are, and have been, ready to meet.”

The Canadian government, however, continued to spurn the call. “Our current focus is on litigation, high-level political intervention and advocacy,” Andrea Lanthier, a spokeswoman for Canadian International Trade Minister Jim Peterson said.

Portman noted Canada enjoys a record $139 billion trade surplus with the United States and the two countries are each other’s largest trading partners.

Softwood lumber accounts for less than three percent of Canada’s exports to the United States, and most of the trade between the two countries is dispute-free, Portman said. (Reuters)