U.S. to Continue Duties on Canadian Lumber after Tribunal Rejects Lump Sum Payment

(World Trade Interactive)

The Office of the U.S. Trade Representative indicated this week that the U.S. will continue to impose a 10% duty on imports of softwood lumber from four Canadian provinces after an international tribunal rejected Ottawa’s attempt to remedy a violation of the 2006 Softwood Lumber Agreement by making a lump sum payment to Washington. The duty was imposed in April but USTR did not indicate how much longer it will remain in effect.

Under the SLA, which aimed to resolve a long-running dispute between the two countries, Canada agreed to impose export measures on shipments of softwood lumber products to the U.S. When the prevailing monthly price of lumber is above $355 per thousand board feet (MBF), Canadian lumber exports are unrestricted. When prices are at or below $355 per MBF, each Canadian exporting region is subject to either an export tax with a soft volume cap or a lower export tax with a hard volume cap, and these measures become more stringent as the market price declines. The SLA includes an adjustment mechanism to ensure that the export volume caps are calculated appropriately under rapidly changing market conditions.

Read more here.