The Softwood Lumber dispute in a nutshell.
The Softwood Lumber dispute centres on the belief that the Canadians are subsidizing the Softwood Lumber industry.
What it truly boils down to is stumpage fees - these are the fees that companies must pay to harvest timber from Crown lands (much of the timber that is cut in Canada sits on Crown or Government owned lands). The US sees these fees as being too low and therefore represent a subsidy.
The coalition of US lumber producers have successfully lobbied their government to impose a 27% tariff on imported lumber (I believe that this is split between a dutiy and an anti-dumping tariff). They also feel that the Canadian producers should be forced to do things their way (i.e. purchase timber rights via auction at market prices).
The dispute first went before NAFTA in August 2003... it was determined that there was a Canadian subsidy but said the US tariffs were too high. It ordered the US to review its position. The NAFTA report pointed out that the US had mistakenly calculated its tariff base on US prices rather than Canadian market conditions. It ordered Washington to recalculate. NAFTA rulings are binding and must be put into effect in 60 days.
A couple weeks later, the WTO panel said much the same thing.
The US chose to challenge this with NAFTA and NAFTA once more ruled against the US.
At first the US claimed this solved nothing. More negotiations were needed. Then, finally, in November 2005, they agreed to recalcualte. The tariff was lowered to 10.8%...
The US has also been ordered to refund much of the billions they have collected in tariffs they overcharged.
The US lumber industry has indicated they will likely appeal the decision.
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"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke
Last edited by Charlatan; 12-15-2005 at 08:27 AM..
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