Conflict on softwood lumber

The softwood lumber conflict is a political and trade dispute between Canada and the United States over the price of timber produced in Canada and sold in the United States. For the US Administration, which is in favor of the arguments put forward by its own industry, Canada and its provinces would subsidize the lumber industry too heavily by granting logging companies too low.

It was in 1930 that the United States closed its market for Canadian lumber for the first time and between 1932 and 1935 the American administration multiplied by four the protective tariff imposed.

In the post-war period, when US market penetration by Canadian industry tripled from 4% to 14% in 15 years, and US producers were shaking hands with President Kennedy, The conflict will take the form as we know it today. But in 1963, the tariff commission concluded that lumber imports did not harm American industry.

In the 1980s, since the Canadian industry is not causing damage to US producers, it only remains to prove that it is a long-term threat to their survival. They failed first in 1983 when the International Trade Administration rendered its decision and said that Canadian lumber is not subsidized.

In 1992, ITA announced a 6.51% tariff on imports of softwood lumber from Canada, except the Maritime Provinces, which Ottawa will challenge before an arbitration tribunal and emerge as a winner. Washington will reimburse Canadian producers for US $ 800 million in countervailing duties.

On May 29, 1996, Canada and the United States concluded the first five-year Softwood Lumber Agreement. This time, quotas will be imposed on imports from British Columbia, Alberta, Ontario and Quebec. When this first agreement expires in 2001, it will be necessary to wait until September 1, 2006 for Canada and the United States to sign a trade agreement. It will be the second renewable trade agreement after seven years and will end in October 2015. (Wikipedia Reference).

Finally, in April 2017, the US government imposed a countervailing duty on softwood lumber and other wood products classified in HTSUS Chapter 44 (Harmonized Tariff Schedule of the United States). This is really a nerve war between Canada and the United States. For how long will countervailing duties be imposed this time, time will tell, but in the meantime, these measures are very detrimental to Canadian producers who do not have a market of 250 million consumers to sell their goods.

For more information do not hesitate to contact us.

Yves Lacelle, Director, Quebec Region Operations.
yves.lacelle@axxessintl.com

1.418.658.5673

Auteur: Yves Lacelle
Source: Wikipedia
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