December 15, 2020

Canada to Challenge U.S. Softwood Lumber Export Duties Through World Trade Organization

Canada said it will be considering “all of its legal options” to challenge Canadian softwood lumber export duties unveiled by the United States last month, the international minister of trade said Friday.

“These duties have caused unjustified harm for Canadian workers and businesses, and are hampering economic recovery on both sides of the border — especially when our people are being affected by the health and economic impacts of COVID-19,” Minister Mary Ng said in a statement.

Ng’s comments come in response to a new 7.42% countervailing duty rate for most Canadian producers of softwood lumber that was established by the U.S. Department of Commerce on November 24. This is in addition to an 1.57% anti-dumping rate, which combined 8.99%.

Previously, Canadians exporting certain softwood lumber products to the U.S. were subject to a combined rate of 20.23%. Last month, the federal government said it welcomed the reduction as a “step in the right direction,” but reaffirmed its position that “unfair” fees on Canada’s lumber industry must come to an end.

In August, the World Trade Organization ruled against the U.S. over duties imposed in 2017 on the grounds that the American government had failed to prove 16 claims related to Canada’s lumber industry, resulting in unfair subsidy for Canadian producers.

Ng said “any duties” imposed on Canadian exports of softwood lumber to the U.S. were “unwarranted and unfair.”

Canadian officials have argued that U.S. duties drove up construction costs in both countries, inflicting further damage on a lumber industry already ravaged by the effects of climate change and the COVID-19 pandemic.

The U.S. Lumber Coalition has countered that even reducing the duty rate “understates true levels of subsidies and dumping,” by the Canadian lumber industry.

(Source: Global News)