No abstract

The Canada-us softwood lumber dispute A test case for the development of international trade rules THE EXCHANGE OF GOODS AND SERVICES between Canada and the United States constitutes the largest trading relationship between two sovereign states. Each country is the other's main trading partner. In 2000, the value of Canada-US trade amounted to nearly CDN$700 billion; now, over CDN$1.5 billion of merchandise crosses the border daily.' The overwhelming proportion (95 per cent) of this bilateral trade takes place smoothly and free of tensions. When disputes have arisen, the two countries have held the positions of plaintiff and defendant in almost equal proportions. Tensions and conflicts have tended to involve issues of essentially circumscribed economic and political scope.Canadas exports of softwood lumber to the United States represents a notable exception to this generally harmonious trading relationship. The softwood lumber dispute has proven the most significant between the two countries in terms of trade volume, complexity, procedures, politicization and duration. Superlatives abound in references to this conflict: "the largest trading dispute in the largest trading relationship in the world." Canada is highly dependent on the American market,

No abstract

No abstract

In the softwood lumber dispute, the United States argues that Canada's forestry practices, especially the fees charged by provincial governments to private firms to harvest trees on public lands (stumpage rights), result in undue subsidization of Canadian lumber. Within the World Trade Organization, the concept of subsidy is defined as a ‘government financial contribution’ that confers a ‘benefit’ on firms and that is ‘specific’. In US–Softwood Lumber IV, the WTO authorities ruled that stumpage rights were specific and constituted a financial contribution through the provision of a good (timber). However, in order to demonstrate whether and to what extent these rights confer a benefit on lumber producers, the United States still has to ensure that its methodology to assess the ‘adequacy of remuneration’ is compatible with WTO provisions and to conduct a satisfactory ‘pass-through’ analysis of the alleged input stumpage subsidy to unrelated downstream lumber producers.