WASHINGTON —

The Coalition for Fair Lumber Imports welcomed the London Court of International Arbitration (LCIA) ruling that subsidies provided by the Ontario and Quebec governments to lumber manufacturers in their provinces violate the terms of the 2006 U.S.-Canada Softwood Lumber Agreement (SLA). This trade agreement prohibits the Canadian federal and provincial governments from providing new subsidies to the Canadian lumber industry after July 1, 2006.

In late 2006 and 2007, Quebec and Ontario announced and implemented plans to provide hundreds of millions of dollars in grants, subsidized loans, and subsidized loan guarantees to lumber producers. The United States initiated dispute settlement proceedings under the SLA with respect to these new subsidies in January 2008.

The Office of the U.S. Trade Representative (USTR) states that, according to the terms of the Tribunal award, Canada must implement a cure for this breach within 30 days or impose additional export taxes for the duration of the SLA. It is anticipated that these additional export taxes will amount to U.S.$ 59.4 million.

Canadian officials are currently reviewing the decision; however, they note that the tribunal only granted an additional one-tenth of a percent export tax (0.1 percent) instead of the 20 percent requested by the USTR.

Posted by Michaelle Bradford

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