Order Code IB10081
Issue Brief for Congress
Received through the CRS Web
Lumber Imports From Canada:
Issues and Events
Updated March 11, 2003
Ross W. Gorte
Resources, Science, and Industry Division
Jeanne Grimmett
American Law Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
U.S. Industry Arguments
Current Issues
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Historical Background
Analysis: Subsidies and Injury
Subsidies: Canadian Stumpage Fees
Subsidies: Export Restrictions
Injury to the U.S. Lumber Industry
Current Issues and Events
The 2001–2002 Countervailing and Antidumping Investigations
Canadian WTO Challenges to U.S. Countervailing Duty and Antidumping Laws
and Proceedings
LEGISLATION
CHRONOLOGY
FOR ADDITIONAL READING

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Lumber Imports From Canada: Issues and Events
SUMMARY
U.S. lumber producers have raised con-
cant growth in Canadian exports and market
cerns about softwood imports from Canada
share, from less than 3 billion board feet
many years. Alleged Canadian subsidies (a
(BBF) and 7% of the U.S. market in 1952 to
prerequisite for establishing countervailing
more than 18 BBF annually since 1998 and a
duties — CVDs) were investigated in 1982,
market share of more than 33% since 1995.
1986, and 1992. No subsidies were found in
Canadians counter that the U.S. industry has
1983. Preliminary subsidy findings led to a
been unable to satisfy the growth in demand.
1986 Memorandum of Understanding (with a
U.S. homebuilders and other lumber users
15% Canadian tax on lumber exported to the
assert that Canadian lumber is needed to
United States), and to a 6.51% CVD in 1992.
satisfy U.S. demands.
The 1992 CVD was challenged under the
U.S.-Canada Free Trade Agreement, and was
Current Issues. The Department of
terminated in 1994. A 1996 Softwood Lum-
Commerce (DOC) initiated CVD and anti-
ber Agreement (SLA) restricted lumber ex-
dumping investigations on April 30, 2001. On
ports to the United States for 5 years, until
March 22, 2002, subsidies were determined to
March 31, 2001. (See CRS Report RL30826.)
be 19.34% and dumping margins 9.67%. On
May 2, the ITC determined that imports had
U.S. Industry Arguments. The U.S.
injured the U.S. industry. The DOC set final
producers argue that they have been injured by
duties of 29%, on May 22, 2002. Canada has
Canadian subsidies, especially for provincial
requested binational panel reviews, under
“stumpage fees” (for the right to harvest
Chapter 19 of NAFTA, of these findings; the
trees). In Canada, the provinces own 90% of
reports are expected in the spring of 2003.
the timberlands; this contrasts with the United
States, where 42% of timberlands are publicly
Canada has filed seven WTO cases
owned and where government timber is often
against the United States in connection with
sold competitively. These differences in land
softwood lumber issues. In August 2001, the
tenure make comparisons difficult.
WTO adopted a panel report finding that U.S.
treatment of export restrictions as a subsidy
In addition, U.S. lumber producers argue
violates the SCM Agreement; the panel did
that log export restrictions in Canada subsi-
not recommend remedial action since such
dize Canadian producers by preventing other
treatment is not mandatory. A July 15, 2002,
producers from getting direct access to Cana-
panel report, adopted August 30, upheld a
dian timber. U.S. log exports from federal
U.S. law creating an administrative procedure
and state lands are also restricted, but logs can
for complying with WTO decisions involving
be exported from U.S. private lands. Canada
antidumping and CVD determinations. Five
has argued in the WTO that U.S. treatment of
cases involve challenges of U.S. actions in the
export restrictions as a subsidy violates the
softwood lumber investigations themselves. A
WTO Agreement on Subsidies and Counter-
final mixed decision involving Commerce
vailing Measures (SCM).
Department preliminary subsidy determina-
tions was adopted November 1, 2002. Panels
Finally, U.S. producers argue that they
have been established in two cases; two are in
have been injured by imports of Canadian
consultations.
softwood lumber. They point to the signifi-
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On May 22, 2002, the Department of Commerce issued its final countervailing duty
order assessing countervailing duties of 19.34% ad valorem (as a percent of lumber values),
and anti-dumping margins averaging 9.67% on Canadian lumber exports. Canada has
requested binational panel reviews of the dumping, subsidy and injury determinations, in
accordance with Chapter 19 of NAFTA, and the panels are expected to report in early 2003.
In five separate cases, Canada is challenging the U.S. investigations before the WTO; a panel
report with a mixed decision was adopted in November 2002, panels have been established
in two cases, and consultations are continuing in the other two cases.
BACKGROUND AND ANALYSIS
Concerns among U.S. lumber producers about softwood lumber imports from Canada
have been raised for decades; the current dispute has persisted for at least 20 years. U.S.
producers argue that they have been harmed by unfair competition, which they assert results
from subsidies to Canadian producers, primarily in the form of low provincial stumpage fees
(the fees for the right to harvest trees from Province-owned timberlands) and Canadian
restrictions on log exports. Canadians defend their system, and U.S. homebuilders and other
lumber users advocate unrestricted lumber imports. This issue brief provides a concise
historical account of the dispute, summarizes the subsidy and injury evidence, and discusses
the current issues and events. (For more historical background and analysis, see CRS Report
RL30826.)
Historical Background
The current dispute began in 1981, when letters from Members of Congress and a
petition from the U.S. lumber industry asked the U.S. Department of Commerce (DOC) and
the U.S. International Trade Commission (ITC) to investigate lumber imports from Canada
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for a possible countervailing duty (CVD).1 The ITC found preliminary evidence of injury
to the U.S. industry, but in 1983, the DOC’s International Trade Administration (ITA)
determined that subsidies were de minimis (less than 0.5%), ending the CVD investigation.
In 1986, the U.S. lumber industry filed a petition for another CVD investigation with
the DOC and the ITC. A 1985 court ruling on an ITA determination of countervailable
benefits on certain imports from Mexico was seen as a favorable precedent for reversing the
ITA finding on Canadian lumber subsidies. The ITC again found preliminary evidence of
injury to the U.S. industry, and the ITA reversed its 1983 determination, with a preliminary
finding that Canadian producers received a subsidy of 15% ad valorem (i.e., 15% of lumber
market prices). On December 30, 1986, the day before the final ITA subsidy determination,
the United States and Canada signed a Memorandum of Understanding (MOU), with Canada
imposing a 15% tax on lumber exported to the United States, to be replaced by higher
stumpage fees within 5 years. This agreement led the U.S. industry to withdraw its petition.
In September 1991, the Canadian government announced that it would withdraw from
the MOU, because most of the provinces had increased their stumpage fees. The U.S. Trade
Representative (USTR) responded by beginning a §301 investigation,2 pending completion
of a new CVD investigation by the ITA and the ITC. In March 1992, the ITA issued a
preliminary finding of 14.48% ad valorem subsidies, with a final determination in May
establishing a 6.51% ad valorem subsidies, leading to a 6.51% ad valorem duty. This was
confirmed in July with a final ITC finding that the U.S. industry had been injured by
Canadian lumber imports.
The Canadian federal government appealed both the ITA and the ITC final findings to
binational review panels under the U.S.-Canada Free Trade Agreement (FTA), which was
signed on January 2, 1988. In May 1993, the binational subsidy panel remanded the ITA
finding for further analysis, and in September, the ITA revised its finding to 11.54% ad
valorem subsidies. In December, the binational subsidy panel again remanded the ITA
finding and ordered the ITA to find no subsidies. In January, the ITA complied with the
order. Using a provision of the FTA, the USTR requested an Extraordinary Challenge
Committee (ECC) to review the binational panel decisions, but the ECC was dismissed in
August 1994 for failing to meet FTA standards. In August, the DOC revoked the CVD, and
in October, the USTR announced that it would terminate the §301 action.
Two events in September 1994 induced Canada to negotiate restrictions on its lumber
exports to the United States. First, the U.S. lumber industry filed a lawsuit challenging the
constitutionality of the FTA review process. Second, the Uruguay Round Agreements Act
(URAA; P.L. 103-465) explicitly approved the President’s “statement of administrative
action” (SAA) that had accompanied his proposed legislation; the SAA stated that, because
1 U.S. trade law (19 U.S.C. 1671-1671h) authorizes countervailing duties on imported goods, if the
DOC determines that the imports are being subsidized (directly or indirectly) by a foreign country
and if the ITC determines that the imports have materially injured a U.S. industry. The duty is set
at the calculated level of the subsidies.
2 Under §301 of the Trade Act of 1974 (19 U.S.C. 2411-2420), the USTR can investigate and can
respond, with a broad range of feasible actions, to foreign trade practices which are found to be
illegal, unreasonable, or discriminatory, and are burdensome to U.S. interests.
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of Canadian practices, lumber imports from Canada could be subject to a CVD. In February
1996, the two nations announced an agreement-in-principle — a fee on Canadian lumber
exports to the United States in excess of a specified quota for 5 years — with the final U.S.-
Canada Softwood Lumber Agreement (SLA) signed in May and retroactive to April 1, 1996.
The SLA was effective through March 31, 2001.
Analysis: Subsidies and Injury
Annual Canadian lumber imports have risen from less than 3 billion board feet (BBF),
about 7% of the U.S. market, in the early 1950s to more than 18 BBF, more than a third of
the U.S. market, in the late 1990s. U.S. lumber producers argue that subsidies to Canadian
producers give them an unfair advantage in supplying the U.S. market and that this has
injured U.S. producers. These two issues — subsidies and injury — are the basis in U.S.
trade law for determining if a CVD is warranted. In addition, “critical circumstances” —
which allow for retroactive duties — are deemed to exist, if imports rise significantly after
ending import restrictions. Finally, dumping — selling imports at less than the cost of their
production — can lead to additional duties.
Subsidies: Canadian Stumpage Fees. The U.S. lumber industry has argued that
the stumpage fees charged by the Canadian provinces are less than the market price of the
timber would be and are therefore a subsidy to Canadian producers. About 90% of the
timberlands in the 10 provinces are owned by the provinces. The provinces require
management plans for forested areas and allocate the timber harvests through a variety of
agreements or leases, often for 5 or more years with renewal options. Stumpage fees for the
timber are determined administratively, often with adjustments to reflect changes in market
prices for lumber. This contrasts with the U.S. situation, where 42% of the forests are
publicly owned and where public timber is typically sold in competitive auctions; thus, much
of the timber in the United States is sold by public and private landowners at market prices.3
The use of administered fees in Canada opens the possibility that the Canadian system results
in transfers to the private sector at less than their fair market value, as the U.S. lumber
industry has charged. However, comparisons of U.S. and Canadian stumpage fees are often
disputed, because of: differences in measurement systems and the imprecision of converting
Canadian cubic meters of logs to U.S. board feet of lumber; differences in the diameter,
height, quality, and species mix of U.S. and Canadian forests; differences in management
responsibilities imposed on timber buyers (e.g., road construction, reforestation); differences
in environmental conditions and policies; and other factors.
Subsidies: Export Restrictions. Export restrictions by British Columbia (BC)
were identified as a subsidy to BC lumber producers by the ITA in its 1992 CVD
investigation. BC generally prohibits the export of logs from Crown (provincial) lands, to
assure domestic production, provide jobs, and encourage economic development. Export
restrictions on public timber in the United States indicate substantially higher prices for
export logs than for comparable logs sold domestically. Most economists would consider
3 Some argue that U.S. federal agencies are not comparable to traditional, market-oriented private
“willing sellers,” because they do not make investments or sales based on profitability, as a private
landowner presumably would. However, the U.S. federal government owns only 33% of U.S.
timberlands, and thus probably has less impact on timber markets than do the Canadian provinces.
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restrictions that reduce domestic prices below the world market price to be subsidies, and the
General Agreement on Tariffs and Trade (GATT) generally prohibits export restrictions. In
addition, current U.S. trade law allows the DOC to consider an export restraint on a product
to be a subsidy if the private parties who would be exporting the product provide the
restrained good to domestic purchasers for less than adequate remuneration. Nonetheless,
Canada challenged the ITA treatment of export restrictions as a subsidy, arguing that this
treatment is inconsistent with the World Trade Organization (WTO) Agreement on Subsidies
and Countervailing Measures. This challenge is discussed more below.
Injury to the U.S. Lumber Industry. Proving injury or threat of injury to U.S.
lumber producers is also essential to establishing a CVD. The share of the U.S. softwood
lumber market provided by Canadian lumber has grown substantially over the past 50 years.
In 1952, lumber imports from Canada were less than 3 BBF, and Canada’s market share was
less than 7%. In 1998 and 1999, Canadian lumber imports were more than 18 BBF, and
Canada’s market share has fluctuated between 33% and 35% since 1995. These facts are
cited by U.S. producers as evidence that Canadian imports have come at the expense of
normal domestic growth in industrial lumber production. U.S. homebuilders and other
lumber users counter that Canadian lumber is essential to meeting domestic demand, and
argue for unrestricted imports. Despite consistent ITC findings of injury, indisputable proof
of injury to U.S. producers is difficult to establish.
Current Issues and Events
Two aspects of this situation are currently the focus of attention in this long-running
dispute over the exports of softwood lumber from Canada to the United States. One is the
2001-2002 countervailing and antidumping investigations. The other is the several WTO
challenges by the Canadians questioning the countervailing and antidumping investigative
processes.
The 2001–2002 Countervailing and Antidumping Investigations. The 1996
U.S.-Canada Softwood Lumber Agreement expired on March 31, 2001. On April 2, the U.S.
Coalition for Fair Lumber Imports filed antidumping and CVD petitions. On April 24, the
DOC announced that it was initiating the antidumping and CVD investigations, because the
petitioners had standing and had shown adequate industry support. On May 16, the ITC
issued its preliminary determination that there was “a reasonable indication that a U.S.
industry is threatened with material injury by reason of imports of softwood lumber from
Canada that are allegedly subsidized and sold in the United States at less than fair value”
(Investigations Nos. 701-TA-414 and 731-TA-928 (Preliminary)). On August 17, the DOC
published its preliminary determination of Canadian subsidies of 19.31% ad valorem (as a
percent of sale value), and established a preliminary duty at that level. DOC also found that
critical circumstances exist, allowing retroactive application of the duty. On November 6,
the DOC published its preliminary determination that Canadian firms were dumping lumber,
with margins ranging from 5.94–19.24% (12.58% for most firms). The DOC also announced
it would align, and postpone until March 25, 2002, final determinations in the CVD and
antidumping cases.
Negotiations were undertaken to forestall final determinations of injury, subsidy, and
dumping. The negotiations collapsed on March 21, 2002, and on March 22, the DOC issued
final determinations, with Canadian subsidies determined to be 19.34% ad valorem, and
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dumping margins ranged from 2.26–15.83% (9.67% for most firms). On May 2, by a 4-0
vote of the commissioners, the ITC issued a final finding of injury. Duties averaging 29%
went into effect on May 22, when the DOC published the final duty notice in the Federal
Register.
Canada and Canadian lumber producers have sought binational panel reviews of DOC
and ITC final determinations in both the antidumping and countervailing duty cases, an
option available under Chapter 19 of the North American Free Trade Agreement (NAFTA)
in lieu of judicial review. The panels have been established to examine whether the DOC
and ITC determinations are in accordance with U.S. antidumping and countervailing duty
law; the panels’ reports are due in early 2003.
On January 6, 2003, the DOC offered a discussion draft entitled “Proposed Analytical
Framework, Softwood Lumber from Canada.” The draft identifies market-based timber sales
as the conceptual starting point, discusses how provincial timber practices could be modified
to conform with this concept, and identifies bases for revoking the countervailing duty and
antidumping margins. No official response has been presented by the Canadians.
Canadian WTO Challenges to U.S. Countervailing Duty and Antidumping
Laws and Proceedings. Canada has initiated seven cases in the WTO in connection with
softwood lumber issues. These cases, identified below with their WTO case number, involve
challenges both to U.S. trade statutes and to the softwood lumber antidumping and CVD
proceedings themselves.
Export restraints as subsidies (DS194). The DOC recognized the
countervailability of export restrictions in its 1992 determination of subsidies involving
Canadian softwood lumber and in a 1990 determination of subsidies involving leather from
Argentina. In the SAA accompanying the Uruguay Round Agreements Act (URAA) (H.Doc
103-316, vol.1, pp. 925-926), and in the DOC’s Federal Register explanation of its
implementing rule (63 Federal Register 65349–65351, Nov. 25,1998), the Executive Branch
confirmed that if it were again to investigate situations and facts similar to those in the two
cases just described, U.S. trade law would continue to permit it to reach the same conclusion.
Canada challenged this policy in the WTO, alleging that the U.S. interpretation, as set forth
in those documents, is inconsistent with U.S. obligations under the WTO Agreement on
Subsidies and Countervailing Measures (SCM). The WTO panel agreed with Canada that
export restraints do not constitute a financial contribution from the government, and thus do
not confer a countervailable subsidy under the SCM Agreement; however, the panel
recommended no remedial action, since U.S. law does not require the DOC to treat an export
restraint as a subsidy and since there was no current U.S. measure based on such a finding.
The panel report was adopted August 23, 2001.
Section 129(c)(1) (DS221). In apparent anticipation of possible U.S. antidumping
and CVD cases against Canadian softwood lumber imports, Canada filed another WTO
complaint against the United States on January 17, 2001, challenging § 129(c)(1) of the
URAA, which sets forth procedures for administrative compliance with adverse WTO panel
reports involving U.S. antidumping or CVD measures. Canada alleged that § 129(c)(1)
prohibits the United States from refunding estimated duties in trade remedy proceedings that
are found to be inconsistent with WTO obligations and thus violates portions of the WTO
Dispute Settlement Understanding and various WTO antidumping and countervailing duty
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obligations. The panel’s report, circulated to WTO Members July 15, 2002, concluded that
the United States was not in violation of its WTO obligations since the law did not mandate
a WTO-inconsistent result. The panel report was adopted August 30, 2002.
Preliminary softwood CVD determinations (DS236). On August 21, 2001,
Canada requested consultations with the United States, claiming that DOC’s preliminary
subsidy and critical circumstances determinations in the softwood lumber CVD proceeding
violated the SCM Agreement and the GATT 1994 (WT/DS236). Regarding the subsidy
determination, Canada cited, among other things, DOC’s treatment of stumpage as a
financial contribution, inflation of the subsidy by calculating a country-wide rate based upon
only a portion of Canadian exports to the United States, and measuring the adequacy of
remuneration for timber that provincial governments sold to lumber producers by comparing
stumpage prices in U.S. and Canadian markets, rather than by referring to prevailing market
conditions in Canada alone. (See 66 Federal Register 45724-45725, August 29, 2001).
The final panel report, circulated to WTO Members September 27, 2002, upheld the
U.S. determination that provincial stumpage programs constitute a financial contribution to
the industry, but faulted the methodology used by DOC in determining whether a benefit was
conferred on Canadian lumber producers, citing the above-mentioned use of cross-border
price comparisons as well as the Department’s failure to examine whether a subsidy had
passed through an unrelated upstream supplier to a downstream user of lumber inputs. While
the panel also found that DOC’s preliminary critical circumstances determination (allowing
provisional duties) was improper, DOC had revoked the finding in its final CVD
determination. Finally, the panel upheld U.S. laws and regulations regarding expedited and
administrative reviews in CVD cases, finding that they did not require the Executive Branch
to act inconsistently with WTO obligations. Neither party pursued an appeal and the panel
report was adopted November 1, 2002. USTR stated in a press release issued at the time
that even though the United States had not appealed the report, it did not agree with the
adverse panel conclusion regarding DOC methodology and would argue in the WTO
proceeding challenging DOC’s final subsidy determination (DS257, below) that the later
panel should disregard these earlier findings. The United States reported to the WTO
November 29, 2002, that it did not need to take any action to comply with the panel report
on the ground that the preliminary duties were no longer in effect and the provisional cash
deposits at issue had been refunded to Canada before the panel report was circulated.
Provisional softwood antidumping measure (DS247).
On March 6, 2002,
Canada requested consultations with the United States regarding the provisional antidumping
measure imposed on Canadian lumber after DOC’s affirmative preliminary dumping
determination October 31, 2001. Canada is arguing that neither the initiation of the
antidumping investigation nor the preliminary determination is in accord with the WTO
Antidumping Agreement. The case remains in consultations.
Final softwood subsidy determination (DS257). On May 3, 2002, Canada
requested consultations with the United States on DOC’s final subsidy determination in the
softwood lumber CVD proceeding. The United States blocked Canada’s first panel request,
made at a July 29, 2002, meeting of the WTO Dispute Settlement Body (DSB). Canada later
withdrew the request, refiled it, and made a new panel request at the DSB’s August 30, 2002,
meeting. A panel was established October 1, 2002, the United States having blocked
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Canada’s August 30 request. Panelists were named November 8, 2002; as a rule they have
6 months from this date to issue a final report to the disputing parties.
Canada’s second panel request cites the same methodologies successfully challenged
in DS236 (discussed above), as well as the stumpage determination and expedited procedures
also at issue in that case. Canada also alleges that DOC improperly initiated the CVD
investigation because it had failed to properly to determine the necessary industry support
for the petition, and that DOC had erroneously found that the subsidy was “specific” to an
industry, a WTO requirement. Canada claims that a proper determination of industry support
is not possible because of the requirements of the Continued Dumping and Subsidy Offset
Act of 2002 (CDSOA), commonly referred to as the Byrd Amendment, which mandates that
collected antidumping and countervailing duties be distributed annually to qualifying
domestic producers and that, to qualify, recipients must have been petitioners or interested
parties in the underlying antidumping and CVD investigations. A WTO dispute panel found
in 2002 that the CDSOA violates various WTO antidumping and subsidy obligations, in part
because the statutory qualification requirement were viewed as facilitating distortions of
actual industry support for antidumping and CVD petitions. The CDSOA panel report was
issued to disputing parties in mid-July 2002 and circulated to WTO Members September 16,
2002; an appellate report issued January 16, 2003, upheld the panel’s finding that the statute
created a “specific action” against dumping and subsidization not allowed under WTO
agreements, but reversed the panel on its findings regarding industry support. The appellate
report and modified panel report were adopted January 27, 2003.
Final softwood dumping determination (DS264). On September 13, 2002,
Canada requested consultations with the United States regarding the final affirmative
determination of sales at less than fair value with regard to Canadian softwood lumber
announced by the Department of Commerce March 21, 2002. Canada claims various
violations of the GATT and the WTO Antidumping Agreement, arguing that the Department
improperly initiated the case because of the lack of sufficient evidence in the petition and the
same failure to gauge industry support alleged in DS257 (discussed above); that the
Department improperly applied a number of methodologies, resulting in artificial or inflated
dumping margins; that it did not establish a correct product scope for its investigation; and
that it failed to adhere to various WTO requirements involving procedural matters in the
investigation. A panel was established January 8, 2003, the United State having blocked
Canada’s first panel request December 19, 2002.
ITC injury investigation in softwood antidumping and countervailing duty
cases (DS277). On December 20, 2002, Canada requested consultations with the United
States regarding the International Trade Commission’s injury investigation in the softwood
antidumping and countervailing duty cases, including its May 2, 2002, final affirmative
injury determinations that resulted in the imposition of duties in each. Canada has claimed
violations of the GATT, the Antidumping Agreement, and the Agreement on Subsidies and
Countervailing Measures, alleging, among other things, that the ITC based its threat of injury
determination “on allegation, conjecture and remote possibility” and that it failed to consider
properly a number of relevant factors in its determinations of injury or threat. The case is
currently in consultations.
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LEGISLATION
None pending in the 108th Congress.
CHRONOLOGY
11/02 –

On November 1, a final panel decision, with mixed results, was adopted by
the WTO.
07/02 --
On July 15, a WTO panel upheld U.S. law for complying with WTO
decisions.
05/02 --
On May 22, the DOC published its final countervailing duty order, with
duties averaging 29%.
05/02 --
On May 3, Canada requested WTO consultations on whether U.S. final
subsidy determination is consistent with the SCM Agreement.
05/02 --
On May 2, the ITC voted 4-0 that the U.S. lumber industry was injured by
Canadian imports.
03/02 --
On March 22, the DOC announced final subsidy findings of 19.34% ad
valorem, and final antidumping margins of 9.67% ad valorem for most
Canadian firms.
03/02 --
On March 6, Canada requested consultations on whether U.S. antidumping
investigation and preliminary determination are consistent with WTO
Antidumping Agreement.
12/01 --
On December 5, a WTO dispute panel was established to hear Canada’s
complaint that the DOC’s preliminary determinations in the softwood lumber
CVD proceeding violate the SCM Agreement and the GATT 1994.
11/01 --
On November 6, the DOC announced its preliminary finding of Canadian
lumber dumping, with margins of 12.58% for most firms, and the alignment
of the antidumping and CVD cases, with the final finding postponed until
March 25, 2002.
08/01 --
On August 23, the WTO adopted a panel report holding that U.S. treatment
of export restraints as subsidies violated WTO agreements. Also on August
23, a WTO panel was established to examine Canada’s complaint that a U.S.
law prohibiting the refund of estimated duties in proceedings found to be
inconsistent with WTO obligations also violated WTO agreements.
08/01 --
On August 21, Canada requested consultations with the United States in the
WTO regarding the DOC’s preliminary determinations in the CVD case.
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08/01 --
On August 17, the DOC issued its preliminary finding of 19.31% ad valorem
Canadian subsidies and of the existence of critical circumstances.
05/01 --
On May 16, the ITC issued its preliminary finding of injury to the U.S.
lumber industry by Canadian lumber imports.
04/01 --
On April 2, the U.S. Coalition For Fair Lumber Imports filed antidumping
and CVD petitions to restrict Canadian softwood imports. On April 24, the
DOC announced the initiation of the antidumping and CVD investigations.
03/01 --
At midnight on March 31, the 1996 Softwood Lumber Agreement expired.
01/01 --
On January 17, Canada requests consultations with United States under WTO
Dispute Settlement Understanding, arguing that U.S. procedures for
administrative compliance with adverse WTO panel reports violate the
Understanding.
09/00 --
WTO panel established to assess Canadian objection to U.S. treatment of
export restrictions.
05/00 --
Canada requests consultations with United States under WTO Dispute
Settlement Understanding, arguing U.S. treatment of export restrictions is
inconsistent with WTO Agreement on Subsidies and Countervailing
Measures.
06/99 --
U.S. Customs Service reclassifies rougher-headed lumber and notched studs
as softwood lumber subject to the SLA.
12/98 --
U.S. Court of International Trade upholds Customs Service ruling that drilled
studs are softwood lumber subject to the SLA.
06/98 --
U.S. Customs Service issues final decision reclassifying drilled studs as
softwood lumber subject to the SLA.
02/97 --
U.S. Customs Service issues New York Ruling Letter B81564 classifying
drilled studs as builders’ joinery exempt from the SLA.
05/96 --
USTR and Canada sign Softwood Lumber Agreement (SLA), retroactive to
April 1, 1996.
12/94 --
Negotiations begin between the USTR and Canada to restrict lumber imports.
10/94 --
USTR terminates §301 action against Canadian lumber imports.
08/94 --
ECC dismissed, and 2/94 binational subsidy panel order affirmed.
01/94 --
Binational subsidy panel orders ITA to find no subsidies; ITA complies.
10/93 --
ITC reanalysis confirms original finding of injury to U.S. industry.
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09/93 --
ITA reanalysis confirms and revises final finding to 11.54% ad valorem
subsidies by Canada.
07/93 --
Binational injury panel remands ITC analysis of injury for further analysis.
05/93 --
Binational subsidy panel remands ITA analysis of subsidies for further
analysis.
08/92 --
Canada challenges ITA and ITC findings under the U.S.-Canada Free Trade
Agreement (FTA), leading to binational panels to review the ITA finding of
subsidies and ITC finding of injury.
07/92 --
ITC issues final finding of injury, confirming the CVD.
05/92 --
ITA issues final finding of subsidies, establishing the CVD at 6.51% ad
valorem.
10/91 --
USTR initiates §301 action; ITA self-initiates a CVD investigation.
09/91 --
Canada announces it will withdraw from the MOU.
12/86 --
Canada and USTR announce a Memorandum of Understanding (MOU) with
a 15% Canadian export tax instead of a CVD.
10/86 --
ITA issues preliminary finding of subsidies, setting a CVD at 15% ad
valorem.
05/86 --
U.S. Coalition for Fair Lumber Imports files a CVD petition.
03/83 --
ITA issues preliminary finding of de minimis subsidies, ending CVD
investigation.
10/82 --
U.S. lumber industry files petition requesting a CVD.
12/81 --
Letters from Members of Congress to USTR requesting a CVD investigation
of lumber imports from Canada.
FOR ADDITIONAL READING
Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US
Softwood Lumber Dispute (Orono, ME: Canada-American Center, Dec. 1997).
Brink Lindsay, Mark A. Groombridge, and Prakash Lougani, Nailing the Homeowner: The
Economic Impact of Trade Protection of the Softwood Lumber Industry (Washington,
DC: Cato Institute, 2000).
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John A. Ragosta, Harry L. Clark, Carloandrea Meacci, and Gregory I. Hume, Canadian
Governments Should End Lumber Subsidies and Adopt Competitive Timber Systems:
Comments Submitted to the Office of the United States Trade Representative on Behalf
of the Coalition for Fair Lumber Imports (Washington, DC: Dewey Ballantine LLP,
April 14, 2000).
FLC Les Reed, Two Centuries of Softwood Lumber War Between Canada and the United
States: A Chronicle of Trade Barriers Viewed in the Context of Saw Timber Depletion
(Montreal, Canada: Free Trade Lumber Council, May 2001).
Random Lengths, What’s New This Week? U.S.-Canada Trade Dispute Timeline (at [http://
www.randomlengths.com/base.asp?s1=In_Depth&s2=U.S.-Canada_Trade_Dispute] on
May 2, 2000).
World Resources Institute, Canada’s Forest at a Crossroads: An Assessment in the Year
2000, a Global Forest Watch Canada Report (Washington, DC: 2000).
CRS Reports
CRS, “Softwood Lumber Imports From Canada,” Trade Briefing Book (at
[http://www.congress.gov/brbk/html/ebtra119.html]).
CRS Report RL30826, Softwood Lumber Imports From Canada: History and Analysis, by
Ross W. Gorte, Feb. 2, 2001.
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