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Softwood Dispute: Canada claims victory at WTO

Canada and the United States are the world's largest trading partners, but there's one thing they've never agreed on: softwood lumber. The dispute dates back hundreds of years, but in the 1980s it turned nasty. The U.S. has slapped billions of dollars of fines on Canadian wood, jeopardizing thousands of jobs. The dispute raises serious questions about trade, sovereignty, and the real nature of Canada-U.S. relations.

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The World Trade Organization says the United States is wrong to impose duties on Canadian softwood. The international body has sided with Canada in the softwood dispute, upholding Canada's position that it does not subsidize its lumber industry. But as we see in this clip from The National, Canadian celebrations may be premature. Some mill owners believe its all part of an American strategy to force them out of business, regardless of international law. 
• The World Trade Organization is an international organization dealing with the rules of trade between countries. The WTO rules are based on the General Agreement on Tariffs and Trade (GATT). Most of the world's trading nations, including Canada and the United States, have signed WTO agreements.
• WTO panels attempt to settle disputes among members. Their decisions have international significance, but are not legally binding within each nation (NAFTA decisions are).

• This WTO decision (the third in Canada's favour) was mostly symbolic. It rejected a 19 per cent duty on Canadian softwood imposed in 2001. But in 2002 a 27 per cent duty was introduced, and the WTO decision had no bearing on that figure. The Canadian government used the win to fuel new talks, which had broken off in February 2002. International Trade Minister Pierre Pettigrew said American negotiators ignored Canada's proposals and deliberately stalled negotiations.

• The U.S. also imposed a 30 per cent duty on foreign steel imports in 2002, in a move to protect domestic steel producers. Canada was exempt from that duty, which the WTO ruled illegal on July 11, 2003.

• In May 2003 the WTO ruled again in Canada's favour in a non-binding preliminary ruling against the countervailing duty. A final report is expected in July 2003.
Medium: Television
Program: The National
Broadcast Date: July 26, 2002
Guest(s): John Allen, Rick Doman, Pierre Pettigrew, Jack Uppal
Reporter: Belle Puri
Duration: 2:34

Last updated: September 19, 2013

Page consulted on January 19, 2015

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