U.S. Lumber Coalition files petition, restarting Canada-U.S. softwood lumber hostilities

The U.S. Lumber Coalition has filed a petition asking the U.S. Department of Commerce to investigate Canadian softwood lumber shipments with an eye to potentially levying new duties, kicking off a fresh round of litigation between two countries with a long history of trade disputes over wood.

The move was previewed Thursday evening in a statement issued by a spokesman for International Trade Minister Chrystia Freeland.

“Canada is prepared for any situation, and our government will vigorously defend the interests of Canadian workers and producers,” Alex Lawrence wrote.

“‎‎Our softwood lumber producers and workers have never been found in the wrong; international bodies have always sided with our industry in the past.”

Canada’s previous agreement with the Americans expired in 2015. A one-year litigation standstill period, during which no new trade actions could commence, expired Oct. 12.

In the meantime, Freeland has been meeting with industry representatives on both sides of the border. She met her counterpart, U.S. trade representative Mike Froman, as recently as last weekend at the APEC summit in Lima, Peru.

But those efforts have not forestalled the resumption of hostilites.‎ 

Susan Yurkovich, the president of the B.C. Lumber Trade Council, expressed her disappointment that it’s come to this, after a year of pressure by the Canadian government working to try to get another deal to prevent costly trade actions.

“The claims levelled by the U.S. lumber lobby are based on unsubstantiated arguments,” she said. “Similar claims were made in the prior round of trade litigation and were ultimately rejected by independent NAFTA panels which concluded that Canadian lumber was not subsidized and did not cause injury to the U.S. industry.  

“With respect to this new action, we are fully prepared to defend our industry and are confident we will again prevail.”

No duties until next spring?

Now that a petition has been filed, the U.S. Department of Commerce may initiate an investigation within the next month.

It could take between 65 and 130 days to issue a preliminary determination on countervailing duties, and even longer for an anti-dumping investigation. 

The earliest Canadian exporters could face duties again is next spring — near the end of the first quarter or early in the second quarter of 2017. But duties could be retroactive for up to 90 days.

A final determination on U.S. duties could come late in the year. The Commerce Department may start with a high determination, begin collecting duties, but then revise downward.

The Canadian government and industry are expected to fire back, challenging the U.S. duties on two fronts simultaneously: a binational NAFTA panel and the World Trade Organization.

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