On Thursday, Canada applauded a trade dispute panel’s decision that the United States should evaluate certain aspects of its softwood lumber policy, including its duty policy on the majority of such products exported from its northern neighbour.
The tariffs are the result of a protracted trade dispute over Canada’s timber sector’s organisation that was unresolved when a quota agreement ran out in 2015. Producers in the US claim that Canada unjustly supports its timber industry.
As the majority of U.S. timber is harvested from private land at market rates, the United States has based its tariffs on the conclusion that Canadian timber produced on federal and provincial lands with low government-set stumpage fees constitutes an unfair subsidy.
The decision stated on Thursday that it was ordering the US to evaluate how export taxes are handled. The commodity was subject to a duty rate of 7.99% determined by the US Commerce Department in July.
“Canada is pleased that the NAFTA (North American Free Trade Agreement) dispute panel agrees that elements of the U.S. dumping determination are inconsistent with U.S. law,” said Trade Minister Mary Ng in a statement.