Another Softwood Lumber Crisis Looming?

(Embassy – Teresa Hille)

Two American senators managed to sneak controversial amendments into that country’s Farm Aid bill before it was approved by Congress on May 7. Now U.S. importers will have to certify that tariffs and duties have been added to the price of lumber before it is exported.

The move has prompted concern Canada is facing another softwood lumber war less than two years after the Conservative government proudly said it had resolved the conflict. While a clerical error means the bill has to be voted on again, Embassy asked:

“What do you make of the fact that two American senators inserted into this month’s U.S. Farm Bill a requirement that will force U.S. importers of Canadian lumber to certify that the appropriate tariffs and duties have been added to the lumber’s price before it is exported?”

David Emerson, minister of international trade – “Well, it’s something that we’re strongly opposed to. We actually think that it’s counter to the softwood lumber agreement. The U.S. trade representative was opposed to it as well. This is something that Congress is doing and the president has vetoed. We’ll see what happens next week when it goes back for a revote in Congress.”

Brenda Swick, Ottawa-based lawyer with McCarthy Tétrault – “These new requirements are illegal under the 2006 agreement, which gives Canada the sole authority to impose and administer export taxes on shipments to the U.S. They give the U.S. the unilateral authority to expand the scope of the products covered under the agreement. They impose costs unforeseen under the agreement on Canadian exporters. And if imposed, they ought to be immediately challenged by Canada under the dispute settlement provisions in the agreement.”

Debra Steger, University of Ottawa professor of international trade – “I think it’s adding another barrier to exports of softwood lumber into the U.S. that is not a necessary barrier. It shows a lack of trust on the part of the U.S. Congress and certainly in the administration of the softwood lumber agreement. It’s not one of the criteria set out in the softwood lumber agreement.”

Elliot Feldman, Washington-based lawyer at Baker and Hostetler – “Now this act I believe...probably violates NAFTA the same way the Byrd Amendment did. I don’t believe there was notice. I don’t believe there were consultations. I don’t believe therefore that the passage of [the Farm Bill] conforms with the NAFTA requirements. And I haven’t heard any Canadian protest – it should have come from the government.”

More responses in the complete article. Additional information on the Import Declaration amendments in the Farm Bill is available here.