Canada Says It Will Open USMCA Dispute Over Softwood Lumber

Canadian Trade Minister Mary Ng said her government has filed notice that it is bringing a state-to-state dispute under USMCA over the increase in antidumping and countervailing duties on most Canadian softwood lumber exports. The Commerce Department issued the final results of the reviews in November (see 2112020026).

"Rulings on this issue have consistently found Canada to be a fair trading partner, and Canada is confident that rulings will continue to find Canada to be one," she said, adding, "Canada has repeatedly communicated to the United States that it is willing to work toward a negotiated solution to this long-standing trade issue that would allow a return to predictable cross-border trade in softwood lumber for the benefit of workers in both countries."

Canada and the U.S. used to have a flexible system of export constraints that rose and fell with the price of lumber in the U.S., but that nine-year suspension agreement ended in 2015 (see 1603300040).

Rep. Kevin Hern, R-Okla., and Rep. Brian Higgins, D-N.Y., wrote to Commerce Secretary Gina Raimondo on Dec. 20, saying they heard that both the administration and Canada are interested in trying to reach another settlement. "We are supportive of these efforts and request that all parties come to the negotiating table to reach a balanced agreement that counters unfair trade practices. Such an agreement would be in the interests of the United States because it would provide predictability to homebuilders and job security for the millions of hardworking Americans who apply their skills every day in the construction industry. Resolving this matter in a balanced way would help the economy recover from the disruptions of the past year," they wrote.

The congressmen said that the decision to increase AD/CVD rates will hike the cost of building materials, putting the construction sector under strain. "Historically high lumber and building material prices continue to imperil the U.S. housing sector and the jobs of the skilled workers in this sector," they said. "While lumber prices began a sharp decline in May, it took months for a meaningful portion of those decreases to reach the construction industry and its customers. Unfortunately, prices began rising again in September and have increased substantially in the past weeks."