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Canada seeks to conduct a judicial review of the recent American decision regarding softwood lumber duties.

Canada seeks to conduct a judicial review of the recent American decision regarding softwood lumber duties.

By Omayma othmani

Published: August 23, 2023

The federal government opposed the recent U.S. decision to continue imposing tariffs on Canadian softwood lumber.

Canada has requested a judicial review of the U.S. Department of Commerce's assessment of the tariffs last month, which International Trade Minister Mary Ng described in a statement as unfair and illegal.

Ng framed this move as an attempt to escalate exporters' concerns while encouraging the U.S. to consider a negotiated solution to the dispute that has plagued Canadian-American relations for decades.

She said on Tuesday during a cabinet meeting in Charlottetown, "We must continue to explore new ways (to resolve the issue), because the industry expects us, expects me, expects my government to do this - and so do its workers. It would be much better to sit at the negotiating table, to come together and reach an agreement. But in the meantime, we will use all available tools to defend this industry."

The recent administrative review by the U.S. Department of Commerce resulted in a modest decrease in the so-called combined tariff rate but kept it at 7.99 percent.

U.S. Trade Representative Katherine Tai (left) also said that negotiations can only occur when Canada sheds its lumber tariff system.

In Canada, the provinces that produce timber set what are called stumpage fees on timber cut from Crown lands, a system that U.S. producers - forced to pay market prices - say amounts to unfair subsidies.

This is not the first time Ng has pressed her American counterparts for assistance in reaching a solution. However, U.S. Trade Representative Katherine Tai stated that negotiations can only happen once Canada gets rid of its lumber tariff system.

The Department of Commerce and officials in Tai’s office did not immediately respond to media inquiries on Tuesday.

Canada successfully argued in the World Trade Organization in the past

Ng stated in her remarks that the United States has imposed unfair and illegal tariffs on Canadian softwood lumber for many years, harming the Canadian industry and increasing housing costs in both countries.

Canada is taking the necessary steps to effectively defend the interests of our softwood industry and the workers and communities that rely on it.

Ng also said that Canada has successfully convinced World Trade Organization dispute panels in the past that its stumpage fee system is not a subsidy - which is exactly why the government feels it is still in the right.

The fourth administrative review of the tariffs conducted by the Department of Commerce, announced last month, set a combined rate of 7.99 percent, just slightly below the 8.59 percent rate determined after the previous review.

U.S. lumber producers welcomed this decision, saying the tariffs ensure a level playing field south of the border and allow local forestry and construction industries to thrive.

Andrew Miller, president of the American Softwood Lumber Coalition, said that such enforcement is exactly what needs to happen for long-lasting growth in the availability of softwood lumber manufacturing in the U.S. to meet the demand for building more American homes.

Failure to fully enforce trade laws will only undermine long-term confidence in expanding softwood availability in the U.S. and jobs in the American softwood industry.

The U.S. industry remains open to a new agreement on softwood lumber, but Canadian producers have not yet agreed on a unified position that would allow the two governments to negotiate an agreement, the coalition says.

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