b'CANADA CHALLENGING UNFAIR US DUTIES IMPOSED ON SOFTWOOD LUMBER EXPORTSThe long-standing lumber dispute between the US and Canada heating upagainby Leo Ryan, AJOT September 2023 | Published in AJOT Issue #757While its often pointed out that The United States and CanadaThe U.S. reduced its anti-dumping and countervailing duty rate share the worlds longest undefended border, the two friends alsoto 7.99% from 17.6%, but Ng signalled that Canada would still fight share one of the worlds longest running trade disputesa disputethe measures.over Canadian lumber exports to the United States. The essenceAt the heart of the dispute: the low stumpage fees Canadian of the disagreement is Canadas disapproval of US duties imposedprovinces charge for timber harvested from Crown land have been on allegedly subsidized Canadian softwood lumber exports. Forqualified as akin to subsidies since US producers must instead pay decades, the softwood lumber conflict has refused to go away.market rates.And the latest developments suggest there is little room for com- What are stumpage fees? They are the price a forestry company promise on bilateral negotiations in the current iteration. pays to the landowner to harvest timber from a certain area. This Canadianforestryindustryinterestsgenerallyseethetariffsprice was initially set based on the number of trees harvested (or asunproductivehurtingproducersinCanadawhileharmingprice per stump). Today, it is determined based on quantity units, consumers south of the border already dealing with inflation andsuch as cubic meters, board feet or tons.supply chain issues. In Canada, the forest areas are mainly located on land owned Between 2017 and 2021, it has been estimated that the dutiesby the federal or provincial governments and the provinces lease costCanadianproducersaboutC$5.6billiontoexportthethese areas to forest companies for the purposeof timber harvest-resource. Some two thirds of Canadian softwood lumber produc- ing. The stumpage rates are defined by law. On the other hand, in tionwith British Columbias massive forests the dominant factorthe United Statesa large portion of the forested land is privately - is exported, with more than 80% flowing to the United Statesowned (70%). Timber from the private sector is sold on the open amounting to over $8 billion in value. market through different buyer/seller agreementsin effect on Unfair, Unjust, Illegalcompetitive auctions responding to market demand.In the past, Canada has successfully argued that its stumpage In late August, Canadas International Trade Minister Mary Ngfees are not a subsidy under the dispute resolution provisions of said Ottawa is formally challenging as unfair, unjust and illegal athe World Trade Organization (WTO).July assessment of the levies by the US Commerce Department. Canada is launching challenges to the latest US countervailing Canada is launching challenges to the latest U.S. countervailingduty determination under Chapter 10 of the United States-Mexi-duty determination under (CUSMA) Chapter 10 and to the latestco-Canada Agreement (USMCA) and to the latest US. anti-dumping U.S. anti-dumping duty determination before the US Court of Inter- duty determination before the US Court of International Trade, Ng national Trade, Ng said. indicated.38'