U.S. challenges Canadian compliance with 2006 softwood lumber agreement
The Bush administration will seek arbitration challenging the Canadian government's compliance with the bilateral Softwood Lumber Agreement, which entered into force on Oct. 12, 2006.
'It is truly regrettable that, just 10 months after the agreement entered into force, the United States has no choice but to initiate arbitration proceedings to compel Canada to live up to its SLA obligations relating to export volume caps, proper application of the import surge mechanism, and anti-circumvention,' said U.S. Trade Representative Susan Schwab in a statement on Tuesday. 'Our efforts to resolve these matters through consultations have not been successful.'
In addition, the Office of the U.S. Trade Representative is working with the Commerce Department to take steps to monitor the implementation of the agreement and gather information on compliance with its terms.
'This information will allow us to consider any future steps necessary to ensure that the SLA is fully implemented,' Schwab said.
Under the SLA, Canada agreed to impose export measures on Canadian exports of softwood lumber products to the United States. When the prevailing monthly price of lumber, determined by the agreement, is above $355 per 1,000 board feet, Canadian lumber exports are unrestricted. When prices are lower than $355 per 1,000 board feet, each Canadian exporting region is subject to either an export tax with a soft volume cap or a lower export tax with a hard volume cap or 'volume restraint.' The current prevailing monthly price of lumber is $309 per 1,000 board feet.
The SLA allows 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 London Court of International Arbitration. After arbitration is requested, there is a two-month process to select arbitrators, and pursuant to the SLA the arbitral tribunal must issue a decision within six months of its appointment.