FOREST INK: Will imposing punitive duties by Canada work?

If Canada decides to impose duties to match those from the U.S.A. it may take some time to see if it works at getting a better deal on the softwood lumber issue. Canadian duties may help in the bargaining process but I suggest we will still be still be following a similar negotiating format for long-term stability if that is possible.

I found an interesting paper on the history of the softwood lumber negotiations and some of the recommendations from a series of meetings between government staff and industry.

Anti-dumping and countervailing duties being applied on certain Canadian Softwood Lumber Products Report of the Standing Committee on International Trade Honourable Judy A. Sgro, Chair November 2023  House of commons.

Recommendation one

That the Government of Canada continue with and enhance its engagement with the Government of the United States concerning the United States’ anti-dumping and countervailing duties that are currently being applied on certain Canadian softwood lumber products. In part, the engagement should focus on efforts to ensure that dispute- settlement processes both at the World Trade Organization and under trade agreements are fair and impartial, and lead to timely decisions.

Recommendation two

That the Government of Canada continue with and enhance its collaboration with sectors in the United States that support an end to the anti-dumping and countervailing duties that country is applying on certain Canadian softwood lumber products. As part of this collaboration, the Government should discuss options for effectively advocating in the United States, and should support initiatives that would increase these sectors’ ability to participate directly in dispute-settlement processes.

Recommendation three

That the Government of Canada appoint an official softwood lumber emissary for Canada to engage with United States officials to enhance Canada’s efforts designed to encourage the U.S. administration to negotiate a resolution to the current softwood lumber dispute.

Recommendation four

That the Government of Canada acknowledge that achieving an agreement with the United States regarding trade in softwood lumber products ultimately will occur only through direct head-of-government negotiation. Efforts to achieve a fair, reasonable and durable resolution of the current softwood lumber dispute should be made a high-level priority in dealings with the U.S. government at the leader-to-leader level.

Recommendation five

That the Government of Canada establish a strategy for investment in value-added transformations of wood within Canada.

Recommendation six

That the Government of Canada ensure recognition of the specific characteristics of Quebec’s forestry regime, which—since the implementation of the province’s Sustainable Forest Development Act in 2013—has established a market-based system for the pricing of timber and related products from Quebec’s public forests, and has resulted in full compliance with North American free trade rules.

Recommendation seven

That the Government of Canada take immediate actions designed to ensure that products from private forests in Canada are not subject to U.S. anti-dumping or countervailing duties.

A section on World Trade Organization (dispute-settlement) showed some of the delay tactics used by the U.S.A. which may be improved with imposition of Canadian duties. They explained that Canada and the United States appealed the AD and CVD results—respectively—to the WTO’s Appellate Body, which currently lacks quorum due to the United States’ unwillingness to consent to the appointment of members.

In future articles I would like to take a closer look at Recommendation number six to see of other provinces could adopt some of Quebec’s practices.

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