Effects Of The Softwood Lumber Dispute

With Billions of dollars in Trade each year, Canada and the United States are each other’s largest trading partners and are considered the largest trading relationship in the world. Since the 1994 implementation of The North American Free Trade Agreement, commonly referred to as NAFTA, has made trade between Canada and the United States strengthen. There are thousands of imports and exports between Canada and the United States but the three major commodities being traded would be Oil, Vehicles and Natural Gases. “For 2010, the bulk of the gains in exports to the United States occurred in three categories: mineral fuels and oils, motor vehicles, and precious metals and stones. Together, these categories accounted for over 95 percent of the increase in bilateral exports during the past year.” (Government of Canada) Trading relationships between Canada and the United States have not always been pleasant. There have been many disputes between the two countries and the one that sticks out is the softwood lumber dispute. This dispute has been one of the longest and most important between the US and Canada. This dispute comprised of many different issues, but Provincial/territorial stumpage fees, Allegations of Canadians dumping and Canada’s Multi Jurisdictional forestry Management System were key topics in the dispute. This softwood lumber dispute has been ongoing since 1980 and there have been four different trade disputes.

Firstly, What is softwood lumber? It is wood based on the tree’s method of reproduction. This type of tree is referred to as gymnosperms and usually come from coniferous trees. Softwood forests are found in both Canada and the United States and is the most popular wood used commercially in North Amer...

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... to force a 6.51% countervailing duty on Canada, which led to legal battles between the two Countries under the Canada-US Free Trade Agreement. The US Department of Commerce had to again get involves and ended up revoking the countervailing duty order in 1994. 1994 was a big year for the Lumber dispute because Canada and the United States finally made an agreement to put into action a consultative process on the softwood lumber trade to make sure there was not going to be anymore disputes between the two countries. In 2001 this agreement had expired leaving both countries confused on what to do next, which led to Lumber dispute IV which lasted until 2006.

Finally, In 2006 Canada and the US finally made an agreement that has lasted to the present. Both countries signed a legal text of agreement. In 2006 the Federal Parliament passed this legal text into law.