By Barry Ellsworth
TRENTON, Canada (AA) – Canada launched a trade challenge Tuesday to U.S. imposed tariffs on Canadian softwood lumber, using the North American Free Trade Agreement (NAFTA) dispute mechanism.
Earlier this month, the U.S. Department of Commerce sided with the American lumber industry’s contention that Canadian lumber was subsidized by the government and imposed a combined tariff of 20.83 percent on imports.
Canadian officials said at the time they would challenge the tariffs, and Tuesday they made good on the threat.
“We will forcefully defend Canada’s softwood lumber industry, including through litigation, which we are launching today,” Canada’s foreign ministry said in a statement. The ministry went on to say that the tariffs on Canadian lumber exports into the U.S. were “unfair, unwarranted and deeply troubling”.
The U.S. Commerce Department said Canada subsidizes its lumber because the Canadian provinces own most of the forested land from which the timber is cut, while the American forests are predominately privately held.
Ironically, Canada filed the challenge under the NAFTA Chapter 19 dispute mechanism and in the renegotiations underway to cut a new NAFTA deal between Canada, the U.S. and Mexico, the U.S. wants to eliminate Chapter 19.
The Americans unilaterally imposed the tariffs after the U.S. and Canada could not reach a mutually agreeable settlement to the decades-long lumber dispute.
In 2016, the U.S. Commerce Department said the United States imported about US$5.66 billion in softwood lumber – used mostly for house construction – from Canada.
About 360,000 Canadians were employed in the lumber industry in 2013, according to Statistics Canada.