WTO sides with Canada on American lumber duties

World Trade Organization finds U.S. claims of harm from Canadian lumber exports not supported

B.C. lumber producers have been paying millions in duties, which WTO finds largely unjustified. | Getty Images

Once again, the World Trade Organization (WTO) has sided with Canada and against the U.S. in its never-ending claims of harm to its lumber industry and punishing duties.

In 2017, following the expiration of the last Canadian-American softwood lumber agreement, the U.S. Commerce Department levied countervailing duties on Canadian softwood lumber imports, on the basis that the Canadian lumber industry is unfairly subsidized by Canada's Crown tenure system, which means most of the lumber in Canada comes from publicly owned forests.

As usual, Canada appealed the duties to the WTO, and today the WTO once again found the American claims of harm by Canadian exports were largely unfounded, according to the BC Lumber Trade Council (BCLTC).

"We have always maintained that B.C.'s forest policies are trade compliant," B.C. Premier John horgan said n a press release.This ruling by the WTO, yet again, confirms that.

"While this decision is a victory for B.C.'s lumber producers, immediate relief is unlikely. Our work continues until we bring an end to the unfair U.S. duties on Canadian softwood lumber exports."

“For more than three years, our industry has paid billions of dollars in countervailing duties that today’s decision confirmed should never have been paid in the first place,” BCLTC president Susan Yurkovich said in a press release.

According to the lumber trade council, the WTO found 40 instances in the U.S. Department of Commerce's claims were not substantiated.

"This report is a scathing indictment of the U.S. Department of Commerce’s subsidy findings and the biased process it followed in reaching them," Yurkovich said.

“For three decades, we have been saying that the U.S. trade remedy process is flawed. Unfortunately, this is just the latest chapter in the ongoing attack on the Canadian lumber industry.

"Each of the prior two lumber disputes ended with neutral, international tribunals issuing rulings that forced Commerce to rescind their flawed and unsupported subsidy findings for similar reasons.

"Today’s decision is an important step towards, what we expect, will be the same result. If the errors identified by the WTO panel are properly addressed and corrected, the Department of Commerce would have no choice but to completely reject the U.S. industry’s subsidy claims and put an end to these baseless claims against Canadian producers.”

To date, Canadian lumber exporters have paid  $3.9 billion in duties, half of which -- $2 billion -- was paid by B.C. producers, according to the BCLTC.

nbennett@biv.com

@nbennett_biv