U.S. concerned with Canada’s Community Development Trust

U.S. concerned with Canada’s Community Development Trust The United States expressed concern this week about Canada’s Jan. 10 implementation of a $1 billion Community Development Trust, which includes aid to Canada’s forestry sector.
   U.S. Trade Representative Susan Schwab sent a letter to Canadian Trade Minister David L. Emerson seeking Canada’s assurance that any funds disbursed to the forestry sector from the trust will be used in a way that’s consistent with Canada’s obligations under the U.S.-Canada Softwood Lumber Agreement.
   The softwood lumber agreement entered into force on Oct. 12, 2006. Under the SLA, the Canadian government committed to not reducing or offsetting the agreement’s export measures through the introduction of new subsidies to producers or exporters of Canadian softwood lumber products.
   On March 30, 2007, the United States requested formal consultations with Canada to resolve concerns over Canada’s implementation of the export measures, in particular the operation of the SLA’s surge mechanism and quota volumes, in addition to several federal and provincial assistance programs that benefit the Canadian softwood lumber industry.
   After formal consultations failed to settle these concerns, the United States requested international arbitration under the terms of the agreement on Aug. 13, 2007. That arbitration challenges Canada’s application of the import surge mechanism and quota volumes.
   According to the USTR, the United States expects to file a second request for arbitration shortly challenging a number of assistance programs implemented by Quebec and Ontario.