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Canada Considering Retaliatory Measures in Softwood Lumber Dispute

Tuesday, May 09, 2017
Sandler, Travis & Rosenberg Trade Report

The Canadian government is considering measures that could be imposed in response to what it deems “unfair and punitive” U.S. antidumping duties on imports of softwood lumber from Canada. However, both sides say they are willing to pursue a negotiated settlement like the one that put the long-running dispute on hold for a decade before expiring 18 months ago.

Canadian Prime Minister Justin Trudeau said in a May 5 letter to Christy Clark, premier of the province of British Columbia, that his government is “carefully and seriously” considering Clark’s request to ban shipments of U.S. thermal coal to Asia through BC ports. These shipments have been increasing for years, Clark said, as every proposal for coal export facilities on the U.S. West Coast over the past five years has been rejected or withdrawn, typically as a result of ecological or environmental issues.

Clark said banning U.S. thermal coal shipments through BC ports would aid efforts to reduce global greenhouse gas emissions but made clear that the timing of any such ban would be directly related to the softwood lumber dispute. She also noted that a ban would “open up additional [export] capacity for metallurgical coal that is used to make long-lasting steel” (ostensibly abroad), which could be a more subtle jab at a Trump administration that has put a high priority on reining in an overproduction of foreign-made steel that it says is being dumped on the U.S. market.

The Canadian Press reports that Ottawa is also considering the imposition of countervailing duties on imports of “plywood, flooring, wood chips, packaging material, and wine” from Oregon, home state of Democrat Sen. Ron Wyden, who “has been a hardliner on the lumber dispute.”

However, U.S. Secretary of Commerce Wilbur Ross said the decision to impose the softwood lumber duties was “based on the facts presented, not on political considerations,” and that “threats of retaliatory action are inappropriate and will not influence any final determinations.”

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