The Softwood Lumber Dispute Between Canada and The United States
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Case Details:
Case Code : ECON022
Case Length : 14 Pages
Period : 1983-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : -
Industry : Manufacturing (Forest Products)
Countries : USA and Canada
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"The Government[s] of Canada and the United States made a huge investment in
the Softwood Lumber Agreement to resolve more than 20 years of litigation."1
- Susan Schwab, United States Trade Representative, in March 2007
"The NAFTA panel decision is gravely flawed and signifies a potential end to
an important antidote in the U.S. lumber industry's efforts to counter the
poison that is Canadian lumber industry practices."2
- Steve Swanson, Chairman of the Coalition for Fair Lumber Imports, in
March 2007
"When this incompetent government signed the softwood deal last fall, it
promised seven years of peace and we have got barely seven months."3
- Michael Ignatieff, Member of Canadian Parliament, in April 2007.
Introduction
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In March 2007, the US Trade Representative, Susan
Schwab (Schwab), said that she was keen on discussing the Canadian
forestry programs, both federal and provincial, mentioned in the
Softwood Lumber Agreement (SLA) of 2006, with David Emerson (Emerson),
her Canadian counterpart. The SLA, which came into effect on October 12,
2006, reflected an attempt by Canada and the US to solve their lumber
trade dispute which had dragged on for several decades.
Softwood lumber4 had been one of
Canada's largest exports to the US (Refer Exhibit I for US Imports of
Softwood Lumber from Canada). |
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However, US lumber producers objected to Canada's trade
practices, especially to the stumpage fees5
that the provincial governments collected from lumber companies, saying that
they were so low that they amounted to subsidies.
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The first formal complaint from the US side was made
as early as 1982, when the US Coalition for Fair Lumber Imports (CFLI)6
filed a petition with the US Department of Commerce (DOC).7
The petition claimed that the Canadian government's timber programs gave
an unfair trade advantage to Canadian lumber producers, thus allowing
them to export lumber to the US at prices that were much lower than that
of US lumber. In 1983, the DOC did not find sufficient reason to regard
low stumpage fees as subsidies; but in 1986, it agreed with US lumber
associations' contention that low stumpage gave Canadian lumber
producers an unfair trade advantage. |
The Softwood Lumber Dispute Between Canada and The United States
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