World Trade Organization Issues Scathing Report - International Arbitrators Side with Canada

QUEBEC CITY and TORONTO, Aug. 24, 2020 /CNW Telbec/ - The World Trade Organization (WTO) today released its final report finding in favor of Canada's softwood lumber industry. In its strongly worded 226 pages, an impartial international panel of the WTO found that virtually every reason advanced by the United States for imposing countervailing duties on imports of softwood lumber from Canada is unfounded. According to the WTO report, the USDOC repeatedly failed to provide evidence or reasoning for its decisions and, in most instances, available evidence was expressly contrary to the USDOC's analysis and conclusions.  

The Central Canadian softwood lumber industry, representing Quebec and Ontario, has been unwavering in its position supporting free, unencumbered access to the U.S. marketplace. Lumber from Quebec and Ontario is not subsidized, and the politics of managed softwood lumber trade only serves to benefit a small number of U.S. interests, while adversely impacting Canadian manufacturers, U.S. consumers and millions of hard-working Americans employed in the housing sector.   

Concerned with increased lumber prices and disturbing developments that could hurt the housing sector, and in turn, the overall American economy, Mr. G. Howard, CEO of the U.S. National Association of Home Builders (NAHB), in an August 7, 2020 letter, urged President Trump to "end tariffs averaging more than 20 percent on Canadian lumber shipments in to the U.S." 

The U.S. cannot produce a sufficient amount of softwood lumber to meet domestic demand.  Annual imports of softwood lumber from Canada in most years exceeds 30%. 

International tribunals have consistently held in Canada's favor in a dispute that has spanned decades. Today's report reaches the same conclusion in declaring the imposition of tariffs is contrary to international obligations of the United States. 

The WTO report examined exports from each of Alberta, British Columbia, New Brunswick, Ontario, and Quebec.  In every one of these Canadian provinces the provincial government is the principal owner of the forests and decides the terms for selling to forestry companies rights to cut standing timber, which is called "stumpage." 

The USDOC conjures subsidies by repudiating Canadian commitments to sustainable and environmentally responsible forestry.  The USDOC effectively insists that Canadian forests should be privatized and then sold off by private owners on strictly commercial terms.  In Canada, governments see the forests as a patrimony, a resource that should not belong to any one interest but should be protected for the public good and broader interests.  The United States claims as unfair subsidies every government intervention supporting sustainable forestry.

"This report is another vindication of what we have been saying for decades," Ontario Forest Industries Association President Jamie Lim remarked.  "The Report strikes down every subsidy claim made about Ontario, and rightly so.  Ontario produces and sells fairly.  It is the United States, by imposing unjustified tariffs that is acting unfairly in trade."

"Back in 2013, Québec instituted auctions as the basis for selling stumpage.  Numerous experts have confirmed these auctions as perfect examples of fair markets.  The USDOC has steadfastly refused to recognize them and now the WTO concluded the USDOC is wrong," stated Jean-Francois Samray, President and CEO of the Quebec Forest Industry Council.  "It's about time the United States started playing fair in international trade."

The joint leadership of the Quebec and Ontario softwood lumber industry took this opportunity to thank the Canadian federal government for its strong, principled position during WTO proceedings, and also expressed hope the federal government will continue to recognize the importance of supporting the forest products industry, a critical pillar of the Canadian economy, during this long and expensive dispute. 

SOURCE Quebec Forest Industry Council

OFIA: Jamie Lim, [phone]; QFIC: Caroline Richard, [phone]

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