Tribunal favors U.S. on Canadian lumber spat

Tribunal favors U.S. on Canadian lumber spat    A London Court of International Arbitration (LCIA) tribunal last Friday sided with the United States in the second arbitration brought under the U.S.-Canada 2006 Softwood Lumber Agreement (SLA).
   The tribunal found Canada breached its obligations under the agreement's anticircumvention provisions and determined compensatory export measures to remedy the breach.
   'The tribunal agreed that a number of provincial assistance programs put into place by Quebec and Ontario circumvent the Softwood Lumber Agreement and breach the deal struck by the United States and Canada in 2006,' said U.S. Trade Representative Ron Kirk, in a statement. 'This result is important for U.S. workers, firms and our softwood lumber industry. We look forward to Canada working quickly to implement the decision of the tribunal.'

Kirk

   The tribunal determined that if Canada fails to cure the breach within 30 days, Canada must impose, as an appropriate adjustment to compensate for the breach, additional charges on exports of softwood lumber to the United States originating in Quebec and Ontario. These additional export charges would remain in place for the duration of the SLA and it is anticipated they would result in the collection of $59.4 million. If Canada does not take action, the United States is authorized by the agreement to impose additional import duties on softwood lumber from Canada.
   The SLA entered into force on Oct. 12, 2006, and is expected to remain in force for seven years from that date, with the possibility of extension for an additional two years. The SLA provides for binding arbitration to resolve disputes between the United States and Canada regarding interpretation and implementation of the Agreement. Under the SLA, arbitration is conducted under the rules of the LCIA, and there is no appeal from the decision of the tribunal.
   Earlier last week, the United States initiated a third arbitration under the SLA. The new arbitration concerns U.S. allegations that timber harvested from public lands in the Interior region of British Columbia is being sold for prices below those provided for under the timber pricing system grandfathered under the SLA. The United States contends that this provides a benefit to Canadian softwood lumber producers, which circumvents the export measures provided for in the agreement.