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Canada to Halt Export Charges on Softwood Lumber, Refund Some Payments

Friday, March 28, 2014
Sandler, Travis & Rosenberg Trade Report

Canadian trade minister Ed Fast announced March 26 that the London Court of International Arbitration has ruled in favor of Canada in a dispute over the termination date of export charges on shipments of softwood lumber to the U.S. Fast said that as a result of this ruling the government of Canada will cease to collect export charges of 0.1% and 2.6%, respectively, from Ontario and Quebec softwood lumber exporters. The government will also refund such charges collected after Oct. 12, 2013.

The U.S.-Canada Softwood Lumber Agreement, which is currently scheduled to remain in effect through Oct. 12, 2015, is designed to constrain softwood lumber exports from Canada to the U.S. when demand in the U.S. is low and to allow unrestricted trade in favorable market conditions. As part of this agreement the U.S. agreed to cease the collection of antidumping and countervailing duties on softwood lumber from Canada and to refund US$5 billion in AD/CV duty deposits. In exchange, Canada agreed to apply export charges and volume limitations to shipments of softwood lumber to the U.S. when the price of softwood products falls below a certain level. The additional export charges at issue in this week’s decision were imposed in 2011 after the LCIA determined that certain loan guarantee programs administered by Ontario and Quebec contravened the SLA.

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