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NAFTA panel sides with U.S. softwood lumber decision but B.C. hopes for final win

Last Updated May 23, 2020 at 12:04 am PDT

Fresh cut lumber is pictured stacked at a mill along the Stave River in Maple Ridge, B.C. on April 25, 2019. A NAFTA panel has backed the U.S. International Trade Commission's decision regarding softwood lumber imports from Canada but B.C's industry group still hopes for an ultimate victory. THE CANADIAN PRESS/Jonathan Hayward
Summary

The tariffs, which are on average 21 per cent for Canadian timber, were imposed three years ago

The steep tariff ushered in a difficult era for the already sector in B.C.

VANCOUVER — A NAFTA panel has backed the U.S. International Trade Commission’s decision regarding softwood lumber imports from Canada but British Columbia’s industry group still hopes for an ultimate victory.

The U.S. Lumber Coalition says the decision affirms the USITC determination from December that the imports “materially injured” American producers and workers.

It says in a news release that the harm is caused by the Canadian government providing its lumber industry “massive subsidies” and dumping those products into the U.S. market.

Jeff Bromley is the chair of the United Steelworkers’ wood council and says the news comes as a surprise.

“Extremely disappointing. This is unexpected. In the past, softwood lumber disputes, most recently in 2006-2007, we had won at the NAFTA panel,” he says.

The tariffs, which are on average 21 per cent for Canadian timber, were imposed three years ago, after the previous agreement expired.

Bromley says the steep tariff ushered in a difficult era for the sector.

“It was just another gut punch for the industry. We’ve suffered through mill closures. The fibre supply has gone down. The 20 per cent increase to the costs of our timber for our main customer was a blow to the industry.”

He jokes that he’s almost immune to the bad news.

“It’s closure after closure. In BC we’ve had six of our sawmills – ones where our United Steelworkers are employed – including one this week. Canfor has closed the Isle Pierre mill west of Prince George affecting over 100 of our members.”

The BC Lumber Trade Council also says it is disappointed by Friday’s decision, saying it remains convinced that the determination that the U.S. industry is injured by Canadian lumber imports is “flawed and without merit.”

Despite the decision, it said Canada still has pending World Trade Organization and NAFTA challenges to the U.S. Department of Commerce’s underlying countervailing duty and anti-dumping duty determinations that have yet to be resolved.

Council president Susan Yurkovich says the group representing provincial producers is confident those proceedings will again support Canada’s position and rule the duties are unwarranted.

“We will continue to work with the Government of Canada to vigorously defend against baseless U.S. trade action on softwood lumber,” she said in a news release.

Bromley points out tariffs are about to be reduced. The U.S. Department of Commerce ruled in January that duties should be sharply curtailed starting in August depending on the company and the province.

For lumber produced at Canfor in BC, for example, the tariff was due to go down to five per cent.

“But unfortunately, due to COVID-19, the commerce department gave the industry gave notice it’s going to be another two months before those duties are recalculated,” notes Bromley.