WASHINGTON: The Softwood Lumber Agreement between the United States and Canada is set to expire in current year in October, marking the end of the two-year extension. The agreement prohibits the Canadian federal and provincial governments from providing subsidies to the Canadian lumber industry.
Under the 2006 SLA, the United States agreed to revoke antidumping and countervailing duty orders while the Canadian government agreed to put into place export measures when the softwood lumber market slumps below US$355 per thousand board feet. Special measures were also put in place to deal with surges in exports from individual Canadian provinces and third countries.
Prior to the original agreement, U.S. companies claimed that stumpage fees charged for lumber harvested on public lands in Canada were set at an artificially low level, which, along with other Canadian governmental programs, created a subsidy. In response, the U.S. Department of Commerce imposed countervailing duties on lumber imported from Canada along with antidumping duties on Canadian lumber imports. The dispute was subsequently brought before North American Free Trade Agreement panels, the World Trade Organization, and the U.S. Court of International Trade. Softwood lumber includes wood produced from trees such as spruce, fir, and pine.