Canada is appealing to the US to engage in good-faith negotiations to resolve its protracted bilateral disputes over softwood lumber.
The Canadian Press reports that International Trade Minister Mary Ng approached a recent US Commerce Department review that upheld taxes on Canadian softwood imports.
Minister Ng claims that despite being slightly reduced, the duties continue to be an unjust, pointless, and punitive policy that harms the economies on both sides of the border.
Minister Ng said the two nations could only end the long-standing conflict through a negotiated settlement.
Such a deal is improbable because Canada’s regulatory system disadvantages American producers, a core issue for the United States.
According to Katherine Tai, the US Trade Representative, the US would be open to negotiations if Canada scraps its provincial stumpage fee system.
The provincial stumpage fee system allows Canadian provinces to set prices for timber taken from public land.
US producers believe the system gives Canadian producers an unfair advantage in competitive markets.
“An immediate negotiated solution to this long-standing trade issue is in the best interests of both our countries,” Ng said in a statement.
“Canada is disappointed that the United States is not meaningfully engaging in discussions on a return to predictable cross-border trade in softwood lumber.”
The combined “all others” duty rate set by the Commerce Department is 7.99%, just under the 8.59% set during the previous administrative review.
Minister Ng said Canada would continue its struggle through the United States-Mexico-Canada Agreement’s dispute mechanisms, the World Trade Organisation, and US courts.
“The only fair outcome would be for the United States to cease applying these baseless duties.”
Canadian provinces that produce lumber set so-called “stumpage fees” for timber taken from Crown land; US producers who must pay market prices claim that this system amounts to an unjust subsidy.
Before the two parties had even sat down, federal authorities stated that Canada would never consent to execute such a significant alteration to manage a critical Crown resource.
In 2020 the World Trade Organisation ruled in favour of Canada
The WTO ruled that, in August 2020, the US’s import duties on Canadian softwood violated international trading rules.
It reported that the US could not prove that Canada unfairly subsidised softwood producers by undercharging wood from government land.
At the time, Minister Ng said the US decision to appeal was “confusing since earlier this year, the US decided that the WTO appeal body did not need to exist.”
The US alleged that the WTO had been making decisions beyond its jurisdiction and had refused to appoint new members, leaving it without enough people to operate.
Stephen de Boer, Canada’s permanent representative at the WTO, told a dispute-settlement meeting that the US refused an arbitration offer by Canada, and its appeal to a body the US has rendered defunct is denying Canada any chance to fight the duties.
De Boer said the US had collected almost $3 billion in illegal duties from Canadian softwood producers since they were introduced in 2017.
