Abstract

The US and Canada have been engaged in a softwood lumber trade dispute for several decades. While US lumber producers were of the opinion that softwood lumber from Canada should be considered subsidized goods and therefore a danger to the US lumber industry, Canadian lumber producers regarded US measures to contain imports as protectionist. Both countries pursued the matter through legal channels: the WTO, the NAFTA and the US courts. The two countries also entered into agreements and passed legislation in an effort to resolve the dispute amicably. In spite of these efforts, the lumber dispute remained unresolved. As of mid-2007, the two North American countries continued to be engaged in a battle over lumber. The case looks at some of the aspects of the softwood lumber dispute between the US and Canada and analyzes the impact of this dispute on the trade relationship between the two countries. It ends with a look at the latest Softwood Lumber Agreement entered into by the two countries.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the softwood lumber dispute between the US and Canada
• Learn about the trade practices of these two countries with respect to softwood lumber and to examine issues regarding subsidies, countervailing and antidumping duties, and quantitative restrictions to counter the alleged subsidies
• Analyze the impact of the lumber dispute on the softwood lumber industry in Canada and the US
• and Understand the legislative action taken to resolve the dispute.

Keywords

Trade disputes, Protectionism, Softwood Lumber Agreement, Subsidies, Dispute resolution mechanism, Export charges, US-Canada Free Trade Agreement, Market-based pricing, Administered pricing