Softwood Lomber Dispute Between United States And Canada

Introduction

The softwood lumber dispute is one of the longest and controversial trade disputes between the United States and Canada. The dispute actually represents a number of disagreements due to the difference in lumber “production” process in Canada and the US, which affects the trade between the two nations. The disagreement began in the early 1980s, when the US lumber producers complained to the US Department of Commerce about the unfair practices of Canadian lumber industry and it is still a talking point in today’s negotiations and a solution for this problem doesn’t seem to be imminent and practical. At the heart of this long-lasting softwood lumber debate, is the United States' claim that the Canadian government is unjustly subsidizing

In 2016, it: accounted for about 7% of Canada’s total exports, injected roughly $23 billion into Canada’s economy, directly supported about 211,075 jobs across the country, including an estimated 9,700 Indigenous people and generated more than $1 billion in revenue (2015) for provincial and territorial governments.1 Canada is one of the largest lumber producers and exporters in the world. Around 80% of the Canadian timber production is intended for export, making it a vital aspect of the Canadian economy. Canada sells its forestry products to over 100 countries; its biggest export markets are the United States, the European Union and Japan. The US is heavily dependent on the import of timber from Canada, as domestic supplies are insufficient to meet the customers’ needs. Softwood lumber (cedar, Douglas fir, pine, spruce) is extensively used throughout North America in building constructions, furniture, interior and exterior woodwork, etc. In addition, one of the major current problems that Gordon Ritchie, the former Canadian ambassador for trade negotiations, pointed out in his discussion on “Sunday Edition” is that Canada heavily depends on trade with the US. Over the past decade, most of the Canadian policies were short-sighted, meaning that Canada was more focused on improving trade relations with the US than with the rest of the world. As there is a pretty high chance that the NAFTA will be dissolved in the near future, the trade barriers will go up between these two countries and it will result in firms panicking in the short run2. They will start to contract their production, and they will start laying off staff, as a necessary procedure to decrease their cost. This will affect all of the industries across the country, including the lumber industry (even though NAFTA doesn’t include barriers reduction of the lumber industry, but as all industry contracts, it will inevitably negatively impact the lumber