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Chambliss Pursues Softwood Lumber Case in Canada

Location: Washington, DC

Chambliss Pursues Softwood Lumber Case in Canada

U.S.-Canada Interparliamentary meeting opportunity to loosen trade logjam

U.S. Senator Agriculture, Nutrition and Forestry Committee Chairman Saxby Chambliss (R-GA) will meet with counterparts this weekend as part of the Canada-United States Interparliamentary Group meeting in New Brunswick, Canada. At the forefront of discussion will be the ongoing softwood lumber dispute and other cross border agriculture issues such as cattle and grain. Recognizing a negotiated solution is the only way to end the dispute; Chambliss hopes to engage the Canadian ministers in a constructive dialogue.

"I will seek out Canadian officials to urge a resolution to what has been an unsatisfactory negotiation between our nations' lumber industries," said Chairman Chambliss. "These types of visits are helpful so each side can better understand on a more personal level the issues our constituents confront daily. Both sides have a story to tell, and discussions such as these may provide a good foundation for resolving intermittent frictions in what is generally a long, warm and beneficial bilateral relationship."

The United States has been levying anti-dumping and countervailing duties on Canadian softwood since May 2002, when the International Trade Commission ruled the imports were subsidized through Canada's low provincial timber-cutting fees and other government policies that provide an importer with an unfair advantage in the U.S. market. However, a series of separate trade rulings have each contradicted each other, leaving the issue at a stalemate.

At issue are Canadian "stumpage" programs, through which Canadian provinces provide low-cost timber to Canadian lumber companies for cheap entry and subsidized competition against the United States own domestic lumber market. Subsidizing lumber in this way provides an unfair advantage to those companies, contrary to the World Trade Organization Subsidy Agreement.

U.S. lumber producers recently filed a suit in the U.S. Court of Appeals for the District of Columbia, a direct result of an Extraordinary Challenge Committee panel of the North American Free Trade Agreement (NAFTA) that recently instructed the United States to refund $4 billion in tariffs against Canadian softwood lumber exporters. The World Trade Organization (WTO) issued a contradictory interim ruling in favor of the United States stating that the 2002 imposition of duties on Canadian softwood lumber (subject of the NAFTA panel) did not violate international law. The WTO decision upholds a 2004 determination by the International Trade Commission that American lumber producers are threatened with injury from Canadian softwood imports.

Canada annually exports about $10 billion worth of softwood to the United States, mainly in the form of framing lumber for home construction and renovation. Canadian wood supplies about one-third of the American lumber market.

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