U.S.-Canada Trade Dispute

1982 to present

Last update:  February 11, 2008.

Information about the current U.S.-Canada trade deal

Answers to frequent questions about the tentative agreement — This special report in PDF format was transmitted to all Random Lengths fax and EMS subscribers at 4:00 p.m. Pacific Time, May 12, 2006. Other information helpful to understanding the new U.S.-Canada lumber deal is below:

Explanation of the Random Lengths Framing Lumber Composite Price (pdf format), designed to answer common questions about how the Random Lengths Framing Lumber Composite is calculated.

Items used in the composite, and the monthly averages for the Random Lengths Framing Lumber Composite from 1995 to present, can be found by going to www.rlpi.com > In Depth > Useful Data > Monthly Composite Prices

 

U.S.-Canada Trade Dispute Timeline, from 1982 to present (in PDF file format)

A document showing the U.S.-Canada Trade Dispute Timeline, from 1982 to present (in PDF file format) provides background information year by year on the dispute, covers the process that created the current Trade Agreement, and the results of the agreement since. Updates for the current year are also added below, on this page.

Additional Information on the U.S.-Canada Lumber Trade Issue is available on the Random Lengths Web site at:
Daily WoodWire — U.S.-Canada Lumber Trade Issue: The latest developments in the dispute over Canadian lumber exports to the U.S.

2007

JANUARY 2007 -- The B.C. Ministry of Forests and Range sends a notice to producers in the province warning that the B.C. Interior "is at risk of surging in January."   Using data received from the Department of Foreign Affairs and International Trade, the B.C. government warns that if Interior producers continue to ship at the same average daily rate as they have through January 24, month-end shipments will be about 99% of the adjusted surge trigger.   If the surge trigger is exceeded, the 15% export tax would increase to 22.5% retroactively for January.   By the end of the month, DFAIT updates its shipment data, which shows that no producing regions in Canada are at risk of hitting the surge trigger in January.   Much of the confusion appears to be based on how the surge trigger is calculated.   The monthly allowances are figured in part by U.S. consumption data.   Whether an adjustment factor is applied to calculate the surge trigger has been debated by the U.S. and Canada.   Based on the shipment figures released, it appears Canada will not use the adjustment factor.

MARCH 2007 --   Quebec and Ontario introduced aid packages to benefit their forest industries. U.S. officials complain to Ottawa that provincial aid efforts put Canada at risk of violating the Softwood Lumber Agreement. U.S. officials also claim that Canadian lumber export data to the U.S. is inaccurate.   They say if U.S. consumption levels were adjusted as instructed in the SLA, that the B.C. Interior would have exceeded its surge trigger in January, and Ontario and Quebec would have exceeded their allowable quota volumes for that month.   Canadian officials argue that the adjustment factor does not apply to Option A provinces, and that it won't apply to Option B provinces until the third quarter of 2007, at the earliest.   If the two countries can't resolve the dispute, the issue could be taken to the London Court of International Arbitration for a binding ruling.

APRIL 2007 --   U.S. and Canadian officials hold formal consultations in Ottawa in an effort to iron out their differences in the implementation of the Softwood Lumber Agreement.   It appears that little headway is made in the dispute.   U.S. officials indicate that if their grievances are not resolved they may request a binding ruling before the London Court of International Arbitration in May.   If the case goes before the LCIA, a decision would not be expected until early 2008.

AUGUST 2007 -- U.S. officials request a binding ruling from the London Court of International Arbitration, alleging that Canada is failing to live up to the Softwood Lumber Agreement.   The two countries differ on their interpretations of the so-called "surge mechanism," which increases taxes and decreases quota allotments when certain criteria are met.   The U.S. argues that Canada has not collected enough taxes under the SLA, and has allowed too much lumber to ship to the U.S., according to the quota.   If the London court finds that Canada has violated the SLA, it would have the authority to increase the export taxes on lumber shipments to the U.S. and/or reduce the quota volumes allowed by provinces operating under Option B of the agreement.

SEPTEMBER 2007 -- U.S. officials decide to seek two separate panels through the London Court of International Arbitration.   The first will rule on whether Canada failed to cap its export volumes or properly apply an import surge mechanism.   A second panel will be requested to rule on U.S. allegations that the provinces of Ontario and Quebec assisted the lumber industry through programs that violate the SLA, but the U.S. has not yet formally requested that panel.   A panel of three arbitrators will be selected to rule on each dispute.   A ruling from the first panel is expected in early 2008.

2008

JANUARY 2008 --   The U.S. files its second arbitration case with the LCIA, alleging that Ontario and Quebec provided subsidies to their lumber industries that violate terms of the SLA.   After arbitration is requested, there is an approximately two-month process to select the arbitrators.   Then the tribunal is to issue its decision within six months.   In a separate development, U.S. officials sent a formal letter to Canadian officials, expressing concern about the proposed creation of a $1 billion Community Development Trust, which includes aid to Canada's forestry sector.   

TO BE CONTINUED…