Canada launches NAFTA challenge against U.S. lumber duties

Wednesday, 15 Nov, 2017

Canada is launching a challenge under the North American Free Trade Agreement against recently announced USA duties against Canadian softwood lumber imports. The fifth round of Nafta talks begins Wednesday in Mexico City, and the Trump administration has already proposed eliminating the Chapter 19 dispute panels being used in this challenge from the agreement.

Canada launched a trade challenge Tuesday to US imposed tariffs on Canadian softwood lumber, using the North American Free Trade Agreement (NAFTA) dispute mechanism. The Canadian government and forestry industry say that the flow of lumber from Canada into the United States should be embraced and not feared by Americans.

"The U.S. Department of Commerce's decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted, and deeply troubling", according to a statement issued Tuesday from the office of the foreign affairs minister.

In Tuesday's letter, Canada said the review through Chapter 19 should focus on "the final determination of the U.S. Department of Commerce in the countervailing duty investigation of softwood lumber from Canada".

Canadian softwood lumber has been a source of conflict in US-Canadian trade for three decades and Canada has often won in arbitration under NAFTA's rules. The trade dispute has been an intermittent source of friction for years and was reignited in 2016 when the US lumber industry filed a petition asking for duties.

The Commerce Department's determination must still be approved by the U.S. International Trade Commission, which is scheduled to make its final determinations by December 18, 2017.

Earlier this month, the U.S. Department of Commerce sided with the American lumber industry's contention that Canadian lumber was subsidized by the government and imposed a combined tariff of 20.83 percent on imports.