Is The Softwood Lumber Agreement Part Of Nafta

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In April 2006, the United States and Canada announced that they had reached an interim agreement to end the dispute. The announced Softwood Lumber Agreement (SLA) came into full force in October 2006. The terms stipulated that the period of this agreement would last between seven and nine years. The two countries agreed to a two-year extension in 2012. [7] Under the interim conditions, the United States would lift countervailing and anti-dumping duties if timber prices remain above a specified range. A mixed system of export taxes and quotas on Canadian timber imports would be introduced below the specified range. On the Canadian side, the nation has agreed to enforce the rules, for example in the form of taxes on timber exports to the United States. In particular, Canadian provincial governments have been encouraged to change their pricing systems. Such changes would allow for an unsubsidized system.

Under the agreement, more than $5 billion would be repaid in recovered customs duties. THE ALS establishes a dispute resolution mechanism based on the London Court of International Arbitration (LCIA), a non-governmental institution. Both countries can initiate dispute resolution procedures on issues arising from or implementing the LAC. The hearings will be open to the public, as well as briefs and other documents. [8] The agreement stipulates that hearings must be held either in the United States or in Canada (the location is chosen by the Court of Arbitration). The ALS also provides that the decisions of an arbitration panel are binding on both parties. [9] Americans are cautious with the Canadian provincial government`s forestry policy, which they consider unusual and opaque. Many Americans believe that reducing slaughter costs is being used to promote local employment and other political goals, instead of recouping the actual costs of wood production. On the other hand, many Canadians see conifer wood as an American challenge to Canada`s sovereignty and our ability to manage our natural resources in the public interest.

Such a challenge to Canadian sovereignty, however, is not to be regretted in the United States. Instead, the challenge arises from the international contractual obligations that Canada voluntarily took over decades ago. The multilateral trade agreement that preceded the WTO, the 1947 General Agreement on Tariffs and Trade (GATT), limited Canada`s ability to subsidize its domestic industry. Article VI, paragraph 6 of the GATT states that “the term “contrary tariffs” is a special tariff levied to compensate for premiums or support obligations granted directly or indirectly to the manufacture, manufacture or export of goods.” In its January 2004 decision, the WTO appeals body stated that Canadian practices can be an achievable subsidy. The tariff dispute over wood dates back to 1982 and began with various agreements, which ultimately led to Thursday`s decision. The panel of five Canadian and U.S. officials says there is no evidence that the Canadian softwood industry has harmed U.S. conifer lumber producers. The above difference in the cost of buying wood was the spark that sparked the conifer wood debate.

Canadian levies (based on work, transportation costs, etc.) are significantly lower than prices in the United States.