Canada-US Lumber Dispute

Canada-US Lumber Dispute: Is Litigation Underway?

There have been some recent developments in the decade’s old lumber dispute between Canada and US.The dispute which started in 1982 due to the heavy competition between the Canadian and the US lumber producing companies seems to be entering an important phase in the recent times.

The history of the dispute

The Canadian economy relies heavily on its softwood lumber industry. However, there is one more field, which helped Canada to gain popularity among game lovers. The gambling industry, presented by a wide range of gambling establishment, can boast of its secure sources like ValleyGames web advisor. Here you will find thorough information about best Canadian online casino. As for woods, the land, where all the timber is grown, is owned by the provincial government which leases it out to the harvesting companies on contractual basis once they have agreed on the stumpage rate.This means that the overall cost of timber production is much lesser here. In America the things are different as the timber forests are grown on the privately owned lands. Once the timber is cut, it makes its way into the market after going through several dealers and sellers which escalate the overall price. Not only is American timber production insufficient to meet its demands but is also expensive when compared to Canada. Hence, the US-based companies started the dispute where Canada was blamed for deliberately keeping low prices to dump the market and take it over. The two countries came to a settlement agreement in 2006 and since its expiration in October 2015, the two countries are trying hard to, litigate the dispute between them.

What is the recent progress on the matter?

Although the Canadians are ready to settle for an agreement, the Americans for some reason are hesitant to do so which is leading to undue delay in settlement. If things remain to follow the same course, the Canadian side is ready to take the matters to court to reach a fair settlement between the two like it has been so many times in the past decades as well. But this time it will be a bit different. The case will be handled as a dispute-resolution under the Chapter 19 of NAFTA while the US side is urging Canada to end Chapter 19 altogether.

What is the recent progress on the matter?

David MacNaughton, who is the Canadian ambassador in the Washington, blames the US lumber industry for this delay in reaching an agreement of any sort. According to him, they have been falsifying information and misleading the basic facts. They claim that the Canadians haven’t agreed on a cap and are not united on the terms of the deal which is wrong. Canada agrees to cap the exports to 30% of the US market and only wants that they are allowed to expand it when the market is hot enough that the US alone cannot meet its needs. It is important to note that owing to the increased import duties levied on Canadian lumber, the US has increased the imports from Russia. In the first half of 2017, the imports from the Germany alone were increased by 10 times.

The issue, like it has in the past, would need intervention from the political parties and politicians, especially from the American side. To help both sides, not only an agreement but a proper framework is needed to prevent such an issue from rising up again in the future.