On Sept. 5, a North American Free Trade Agreement (NAFTA) panel ordered the commission to reconsider its earlier finding that Canadian lumber exports to the U.S. were a threat to the health of the U.S. lumber industry.
The NAFTA panel was critical of the commission’s finding, and charged that it was reached “on the basis of considerable speculation and conjecture.” The panel added that it was “particularly troubled by the extensive lack of analysis undertaken by the commission of the factors applicable to a determination of whether there is a threat of material injury to the domestic softwood lumber industry.”
The NAFTA panel can order the U.S. to rescind the duty — which would have the same force as a ruling by U.S. courts — if it does not receive a valid response from the U.S. commission.
Rayburn said that the latest proposal from Ottawa would compromise Canada’s interests in a number of ways.
“First, Canada would have to give up its legal appeals to the World Trade Organization and NAFTA, where its chance of success is very good and where it has already scored significant victories in its bid to break down trade barriers,” Rayburn said.
“Furthermore, if Ottawa were to enter into an agreement with Washington, it would be left at the mercy of U.S. lumber producers, who have a veto over any deal reached with the Canadian government,” he said.
“It makes absolutely no sense for Canada to agree to quotas and the other concessions demanded by U.S. lumber companies,” he said. “Such a deal not only harms Canada, but millions of American consumers who rely on a steady supply of softwood lumber. Quotas interfere with the market and cause increased price volatility, which negatively impacts home builders, lumber dealers, home buyers and consumers in the U.S.”
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