By Canadian Press

U.S. trade office rejects WTO panel decision on Canadian softwood lumber

Aug 24, 2020 | 11:36 AM

WASHINGTON — The U.S. trade representative is taking issue with the latest decision from the World Trade Organization on Canada’s long-standing dispute with its largest trading partner over exports of softwood lumber.

Robert Lighthizer says the panel report from the WTO, which rejects the bulk of the U.S. complaint, unfairly protects Canada from American retaliation against what he calls “massive” lumber subsidies north of the border.

Lighthizer also says the report proves U.S. claims that the trade body’s oft-maligned dispute resolution system is unfair and biased against American interests.

The latest report stems from Canada taking issue with U.S. efforts to impose duties on softwood exports in 2017, although the cross-border dispute over lumber has been raging between the two countries for nearly 40 years.

U.S. producers have long argued that Canada’s system of regulating so-called stumpage fees through the provinces results in the unfair subsidization of an industry that is privately owned and operated south of the border, where pricing is set by the competitive marketplace.

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As a result, the U.S. argues that imports of Canadian lumber are eligible for countervailing duties, according to American trade law.

“This flawed report confirms what the United States has been saying for years: the WTO dispute settlement system is being used to shield non-market practices and harm U.S. interests,” Lighthizer said in a statement.

“The panel’s findings would prevent the United States from taking legitimate action in response to Canada’s pervasive subsidies for its softwood lumber industry.”

In 2017, the U.S. Department of Commerce and the U.S. International Trade Commission agreed that Canada’s softwood lumber industry is unfairly subsidized, “and causing material injury to U.S. softwood lumber producers” as a result, Lighthizer’s office said.

The WTO panel “failed to acknowledge the impact of the Canadian government’s subsidies advantaging the Canadian lumber industry.”

A NAFTA dispute resolution panel concurred with the trade commission’s finding earlier this year, before the new U.S.-Mexico-Canada Agreement took effect in July.

This report by The Canadian Press was first published Aug. 24, 2020.

The Canadian Press