The Globe and Mail reports in its Monday edition that Canada and the United States are about to find themselves quarrelling over softwood lumber again. The Globe's Barrie McKenna writes that the U.S. lumber industry will be in a legal position to file a potentially damaging trade case against Canada at midnight Oct. 12, when a decade-long truce between the countries ends.
If the United States launches a challenge, Canada and the United States will be locked in a lumber trade war for the fifth time since the 1980s. Canada exported $6-billion worth of lumber to the U.S. in 2015 and it is on pace to do much better this year. Through August, exports totalled $5-billion, up nearly 27 per cent from the same period in 2015, buoyed in part by a cheaper Canadian dollar.
The U.S. industry argues that Canadian provinces subsidize lumber companies by charging them too little to log on Crown land. In the U.S., most timber is in private hands and sold at auction.
In 2004, a NAFTA dispute settlement panel declared U.S. tariffs unjustified because the subsidies were minimal, but the litigation will be long. West Fraser, Canfor and Interfor have all acquired U.S. sawmills in recent years as a hedge against trade disputes.
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