Softwood Lumber Dispute with Canada Nears Climax

dispute with Canada regarding softwood lumber ranks as the largest and longest-lasting trade dispute involving the United States. Canada and the United States have battled over alleged Canadian lumber subsidies for over a hundred years. Since 1982, the United States has attempted four times to impose special tariffs or countervailing duties on Canadian imports. The latest effort began in April 2000, and has involved the U.S. courts, the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO), and more than $4 billion in duties. Absent settlement, the case will most likely reach the U.S. Supreme Court's docket by 2007. The case receives little attention in the U.S. press, but in Canada it regularly makes news broadcasts and the front pages of major newspapers. The level of vitriol in the comments of some columnists and officials has caused U.S. Secretary of State Condoleezza Rice to caution against apocalyptic language. Some Canadian officials have suggested that Canada retaliate against U.S. duties by restricting exports of oil or natural gas, or by levying tariffs on U.S. imports. Besides trade policy and international relations, the case has significant implications for the environment and natural resource use and pricing. U.S. producers and some environmental organizations allege that Canadian softwood lumber policies, by keeping prices below market, have artificially promoted timber harvesting and lumber export, but Canadian governments deny this. While the U.S. and Canadian governments have sporadically discussed possible reforms to the Canadian system that could satisfy U.S. interests, a century of disagreement seems unlikely to vanish in the near future. The dispute has its origins in the vast coniferous (softwood) forests that span Canada from the Pacific coast rainforests of British Columbia in the West to the chilly, windswept Atlantic coasts in the East. Except for the maritime provinces of the East Coast and the southeastern portions of Quebec and Ontario, which colonists settled first and where most land became private property, well over 90 percent of all Canadian forest land belongs to the provincial governments. Unlike the United States, where almost all old-growth timber was logged long ago, the large majority of Canadian timberlands have never been logged.

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