U.S. arbitration sought in Canadian lumber dispute
The United States on Tuesday requested arbitration with Canada under the 2006 Softwood Lumber Agreement (SLA) regarding the underpricing of timber harvested from public lands in the Interior region of British Columbia.
'Canada is providing an additional benefit to Canadian exporters of softwood lumber by selling timber harvested from public lands for prices below those provided for under the timber pricing system grandfathered under the SLA,' said U.S. Trade Representative Ron Kirk in a statement. 'By doing so, Canada is in breach of its commitments under the agreement. This type of benefit harms U.S. workers and firms in the lumber industry, and is inconsistent with Canada's obligations under the 2006 Softwood Lumber Agreement.
'When we believe our trading partners are not living up to their obligations, we will not hesitate to enforce our rights under our trade agreements,' he added.
The Office of the U.S. Trade Representative pointed out that growing U.S. concerns over this issue have gone unaddressed by Canada, and the United States requested formal consultations with Canada under the SLA in September 2010. Consultations were held in October 2010, but did not resolve the matter. As a result, the United States is exercising its rights under the SLA to submit the matter to binding arbitration.
The SLA provides for binding arbitration to resolve differences between the United States and Canada regarding interpretation of the agreement. Under the SLA, arbitration is conducted under the rules of the London Court of International Arbitration. Upon USTR's request, the U.S. Department of Justice will be filing the request and handling the arbitration.
The United States has brought two previous disputes under the SLA to ensure proper implementation of the agreement. In the first dispute, a tribunal found that Canada failed to calculate quotas properly during the first six months of 2007 and found that Canada should impose an additional CN$68.26 million in export duties on softwood lumber as compensation. The second dispute is ongoing and concerns several Canadian provincial programs that provide subsidies in circumvention of the SLA. ' Chris Gillis