U.S. knocked by softwood lumber decision

   The Obama administration expressed disappointment in an arbitration tribunal’s decision this week involving a trade dispute over timber harvested in British Columbia.
   “Despite this result, we remain concerned that British Columbia provided publicly-owned timber harvested in its interior to softwood lumber producers for prices far below market value,” said Nkenge Harmon, deputy assistant to the Office of the U.S. Trade Representative. “And it is important to note that the tribunal did not sanction the pricing practices in British Columbia. Rather, as a result of a flawed approach to evaluating the evidence before it, the tribunal concluded that it was unable to find a conclusive link to action by the government of Canada.
   “The fair pricing of timber in British Columbia is in the strong interest of the United States and we will continue to monitor this closely,” Harmon added.
   The United States prevailed in two prior disputes under the Softwood Lumber Agreement (SLA).
   “The Obama Administration is committed to continue vigorously enforcing the SLA and other U.S. trade agreements. Although we remain disappointed in the result of this proceeding, we will continue to ensure that Canada abides by its obligations under the SLA,” Harmon said.
   The 2006 SLA is intended to resolve long-running disputes over Canada’s subsidization of softwood lumber exports. Under the SLA, Canada agreed to impose certain export measures on softwood lumber products when the price of lumber falls below a certain level. The SLA provides that Canada may not circumvent those export measures, including by providing grants or other benefits to softwood lumber producers.
   The United States argued that by selling timber harvested from public lands in British Columbia’s interior region for prices below those provided under the SLA’s timber pricing system, Canada provided a benefit to Canadian softwood lumber producers in circumvention of the agreement’s export measures.