Tribunal: Canada must cure breach of lumber agreement

Tribunal: Canada must cure breach of lumber agreement    An arbitral tribunal on Monday rejected Canada's claims that an offer to pay the U.S. government $36.66 million was enough to cure Canada's breach of the Softwood Lumber Agreement (SLA).
   'The tribunal's decision confirms the view of the United States that the Softwood Lumber Agreement is enforceable,' said U.S. Trade Representative Ron Kirk, in a statement. 'Canada failed to cure its breach, and the tribunal has upheld the ability of the United States to take action in response.'
   In March 2008, the tribunal found that Canada breached the SLA by failing to calculate quotas properly during the first six months of 2007. On Feb. 26, 2009, the tribunal issued its decision on a remedy for that breach, and determined that Canada was required to cure the breach by March 28.

Kirk

   At the time, the tribunal determined that as an appropriate adjustment to compensate for its breach Canada must collect an additional 10 percent ad valorem export charge on softwood lumber shipments from eastern Canadian provinces until $54.8 million has been collected.
   Canada did not impose the adjustment and instead offered to pay the United States $36.66 million to cure the SLA breach. The offer was rejected by the United States and, on April 2, Canada requested the tribunal to determine if it had breached the agreement.
   The SLA entered force on Oct. 2, 2006 and will remain in force for seven years, with the possibility of extension for an additional two years. The SLA provides for binding arbitration, based in auspices of the London Court of International Arbitration, to resolve disputes between the United States and Canada regarding implementation of the agreement.