Ottawa is calling on the U.S. to remove its countervailing duties on softwood lumber from Canada after a World Trade Organization panel ruled against them. However, the Trump administration decried the ruling as another example of the judicial overreach that has prompted its efforts to overhaul the WTO dispute settlement system.
Mary Ng, Canada’s minister of small business, export promotion, and international trade, hailed a “unanimous WTO panel ruling” that she said confirms that Canada does not subsidize its softwood lumber industry. According to a Reuters article, the panel ruled that the U.S. “had not shown that many prices paid by Canadian firms for timber on government-owned lands were artificially low.” As a result, Ng said, the U.S. CV duties “are completely unwarranted and unfair” and “must not persist.” She noted that U.S. homebuilders rely on Canadian lumber and that the duties contribute to “the current record-high lumber prices [that] are hurting the economic recovery in both countries.”
However, U.S. Trade Representative Robert Lighthizer criticized the WTO panel report for failing to “defer to the reasoned judgment of the investigating authority, the U.S. Department of Commerce,” and instead applying “a fundamentally flawed Appellate Body interpretation so that the panel failed to acknowledge the impact of the Canadian government’s subsidies advantaging the Canadian the lumber industry.” Lighthizer said this result confirms the U.S.’ longstanding complaint that “the WTO dispute settlement system is being used to shield non-market practices and harm U.S. interests.”
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