The Canada-us softwood lumber dispute: A test case for the development of international trade rules

International Journal

Volumn 58, Issue 3, 2003, Pages 335-368

  Gagné, Gilbert ^a  

^a BISHOP'S UNIVERSITY   (Canada)

Author keywords

[No Author keywords available]

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EID: 0742323971     PISSN: 00207020     EISSN: None     Source Type: Journal    
DOI: 10.1177/002070200305800306     Document Type: Review

References (129)

1. Canada, Department of Foreign Affairs and International Trade, Trade Update 2001, (Ottawa: May 2001), 7
2. Statistics Canada, CANSIM
3. Subsidization generally refers to a financial contribution, taking the form of grants, loans, or tax concessions that benefit firms. CVDS are based on an evaluation of the subsidy and aim to offset its effect. In addition to CVDS, the US trade remedy legislation includes anti-dumping (AD) measures, safeguard measures (Section 201), and measures to deal with "unfair trade" under Section 301. Only since 2001 have AD measures been used in the softwood lumber dispute. Dumping generally refers to a product imported at less than its normal value, specifically if its price is lower than the one in the exporting country or when destined for a third country, or less than its cost of production. Despite successive US and multilateral provisions aimed at clarifying the notions of dumping and subsidy as well as conditions for the imposition of trade remedies, these remain rather elusive and could lead to abuse. An alternative to the application of trade remedies is for the exporting firm(s) to raise prices (price undertakings), or, in CVD cases, for the exporting country to eliminate or reduce the subsidy, or to take other measures, such as an export tax. This solution has been resorted to in the softwood lumber dispute. As for Section 301, the most far-reaching of US unfair trade law, it has also been used in this dispute. In all cases, imports are subject to remedies if it is found that the goods are tainted by unfairness (through either subsidization or dumping), injury, or sudden surge in imports. Under trade remedy provisions, also known as administered protection, state agencies are empowered to decide whether a particular case justifies action. In the United States, the International Trade Administration (ITA) of the Department of Commerce (DOC) determines the existence of subsidy and dumping, while the International Trade Commission (ITC) makes determination of material injury, or threat of such injury, to the competing domestic industry, the other condition for imposing remedies. A similar sharing of responsibilities exists in Canada between the Canada Customs and Revenue Agency and the Canadian International Trade Tribunal. For a thorough analysis of UStrade policy experience, see I.M. Destler, American Trade Politics (3rd ed;Washington: Institute for International Economics 1995); Anne O. Krueger, American Trade Policy: A Tragedy in the Making (Washington: The AEI Press 1995). For a good summary of US trade remedy legislation and practice, as well as the history and significance of US actions against Canadian exports, see Canada, Department of Foreign Affairs and International Trade, Trade Remedies Division, US Trade Remedy Law: The Canadian Experience 1985-2000 (Ottawa, June 2002).
4. Subsidization generally refers to a financial contribution, taking the form of grants, loans, or tax concessions that benefit firms. CVDS are based on an evaluation of the subsidy and aim to offset its effect. In addition to CVDS, the US trade remedy legislation includes anti-dumping (AD) measures, safeguard measures (Section 201), and measures to deal with "unfair trade" under Section 301. Only since 2001 have AD measures been used in the softwood lumber dispute. Dumping generally refers to a product imported at less than its normal value, specifically if its price is lower than the one in the exporting country or when destined for a third country, or less than its cost of production. Despite successive US and multilateral provisions aimed at clarifying the notions of dumping and subsidy as well as conditions for the imposition of trade remedies, these remain rather elusive and could lead to abuse. An alternative to the application of trade remedies is for the exporting firm(s) to raise prices (price undertakings), or, in CVD cases, for the exporting country to eliminate or reduce the subsidy, or to take other measures, such as an export tax. This solution has been resorted to in the softwood lumber dispute. As for Section 301, the most far-reaching of US unfair trade law, it has also been used in this dispute. In all cases, imports are subject to remedies if it is found that the goods are tainted by unfairness (through either subsidization or dumping), injury, or sudden surge in imports. Under trade remedy provisions, also known as administered protection, state agencies are empowered to decide whether a particular case justifies action. In the United States, the International Trade Administration (ITA) of the Department of Commerce (DOC) determines the existence of subsidy and dumping, while the International Trade Commission (ITC) makes determination of material injury, or threat of such injury, to the competing domestic industry, the other condition for imposing remedies. A similar sharing of responsibilities exists in Canada between the Canada Customs and Revenue Agency and the Canadian International Trade Tribunal. For a thorough analysis of UStrade policy experience, see I.M. Destler, American Trade Politics (3rd ed;Washington: Institute for International Economics 1995); Anne O. Krueger, American Trade Policy: A Tragedy in the Making (Washington: The AEI Press 1995). For a good summary of US trade remedy legislation and practice, as well as the history and significance of US actions against Canadian exports, see Canada, Department of Foreign Affairs and International Trade, Trade Remedies Division, US Trade Remedy Law: The Canadian Experience 1985-2000 (Ottawa, June 2002).
5. Subsidization generally refers to a financial contribution, taking the form of grants, loans, or tax concessions that benefit firms. CVDS are based on an evaluation of the subsidy and aim to offset its effect. In addition to CVDS, the US trade remedy legislation includes anti-dumping (AD) measures, safeguard measures (Section 201), and measures to deal with "unfair trade" under Section 301. Only since 2001 have AD measures been used in the softwood lumber dispute. Dumping generally refers to a product imported at less than its normal value, specifically if its price is lower than the one in the exporting country or when destined for a third country, or less than its cost of production. Despite successive US and multilateral provisions aimed at clarifying the notions of dumping and subsidy as well as conditions for the imposition of trade remedies, these remain rather elusive and could lead to abuse. An alternative to the application of trade remedies is for the exporting firm(s) to raise prices (price undertakings), or, in CVD cases, for the exporting country to eliminate or reduce the subsidy, or to take other measures, such as an export tax. This solution has been resorted to in the softwood lumber dispute. As for Section 301, the most far-reaching of US unfair trade law, it has also been used in this dispute. In all cases, imports are subject to remedies if it is found that the goods are tainted by unfairness (through either subsidization or dumping), injury, or sudden surge in imports. Under trade remedy provisions, also known as administered protection, state agencies are empowered to decide whether a particular case justifies action. In the United States, the International Trade Administration (ITA) of the Department of Commerce (DOC) determines the existence of subsidy and dumping, while the International Trade Commission (ITC) makes determination of material injury, or threat of such injury, to the competing domestic industry, the other condition for imposing remedies. A similar sharing of responsibilities exists in Canada between the Canada Customs and Revenue Agency and the Canadian International Trade Tribunal. For a thorough analysis of UStrade policy experience, see I.M. Destler, American Trade Politics (3rd ed;Washington: Institute for International Economics 1995); Anne O. Krueger, American Trade Policy: A Tragedy in the Making (Washington: The AEI Press 1995). For a good summary of US trade remedy legislation and practice, as well as the history and significance of US actions against Canadian exports, see Canada, Department of Foreign Affairs and International Trade, Trade Remedies Division, US Trade Remedy Law: The Canadian Experience 1985-2000 (Ottawa, June 2002).
6. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
7. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
8. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
9. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
10. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
11. On the softwood lumber dispute, see notably: Michael Percy and Christian Yoder, The Softwood Lumber Dispute and Canada-US Trade in Natural Resources (Halifax: Institute for Research on Public Policy 1987); William J. Davey, Pine & Swine. Canada-United States trade dispute settlement: The FTA experience and NAFTA prospects (Ottawa: Centre for Trade Policy and Law 1996); Charles F. Doran, "Trade dispute resolution 'on trial:' softwood lumber," International Journal 51 (no. 4, autumn 1996), 710-33; T. M. Apsey and J.C. Thomas, The Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process (Vancouver: Council of Forest Industries and Thomas & Davis April 1997); Benjamin Cashore, Flights of the Phoenix: Explaining the Durability of the Canada-US Softwood Lumber Dispute, Canadian-American Public Policy 32 (Orono: University of Maine 1997); Gilbert Gagné, "The Canada-US softwood lumber dispute - an assessment after 15 years," Journal of World Trade 33 (no. 1, February 1999), 67-86.
12. Cashore, Flights of the Phoenix, 2, See also Judith Goldstein, "Ideas, institutions, and American trade policy," International Organization 42 (winter 1988), 179-217.
13. Cashore, Flights of the Phoenix, 2, See also Judith Goldstein, "Ideas, institutions, and American trade policy," International Organization 42 (winter 1988), 179-217.
14. Cashore, Flights of the Phoenix, 3.
15. Jagdish Bhagwati and Robert E. Hudec, eds, Fair Trade and Harmonization: Prerequisites for Free Trade? (Cambridge: MIT Press 1996).
16. Canada, External Affairs, The Canada-US Free Trade Agreement (FTA) (Ottawa, 1987); Canada, North American Free Trade Agreement (NAFTA) (Ottawa: Minister of Supply and Services, 1992). The FTA was agreed to in October 1987 and came into force in January 1989. NAFTA was concluded in August 1992 and became effective in January 1994. Signatories to NAFTA are Canada, Mexico, and the United States. Unless specifically provided, the FTA provisions have been superseded by NAFTA'S.
17. For a thorough discussion of the economic, political, and legal aspects of Softwood Lumber I and II, see Percy and Yoder, Softwood Lumber Dispute.
18. Office of the Federal Register, Federal Register 48 (no. 105; Washington: US Government Printing Office, 31 May 1983).
19. Murray G. Smith, "Overview of provincial and state subsidies: their implications for Canada-US trade," International Economic Issues (Halifax: Institute for Research on Public Policy 1990), 15ff.
20. Federal Register 51 (no. 204, 22 October 1986).
21. Percy and Yoder, Softwood Lumber Dispute, xxix-xxx, 99-101.
22. Canada-United States Softwood Lumber Memorandum of Understanding, 30 (December 1986). For considerations on the MOU, see Percy and Yoder, Softwood Lumber Dispute, 101-3, 115-29.
23. Canada-United States Softwood Lumber Memorandum of Understanding, 30 (December 1986). For considerations on the MOU, see Percy and Yoder, Softwood Lumber Dispute, 101-3, 115-29.
24. Federal Register 52, (no. 315, 1987).
25. General Agreement on Tariffs and Trade (GATT), Basic Instruments and Selected Documents, 34th Supplement (Geneva, 1987), 194-7.
26. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
27. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
28. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
29. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
30. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
31. More precisely, the FTA/NAFTA provisions read "state authorities... may remand (a final determination) for action not inconsistent with the panel's decision." Binational review panels are composed of five neutral experts. Both parties to a dispute appoint two members in consultation with the other and agree on the fifth member. In practice, the composition of panels has witnessed a rotation between a majority of US and Canadian panellists. For more on the FTA and NAFTA negotiations, see Bruce Doern and Brian Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart 1991); Michael Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press 1994); Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal Was Done (Ithaca: Cornell University Press 2000). On the FTA/NAFTA provisions relating to trade remedies and dispute resolution, see Davey, Pine & Swine; Gilbert Gagné, "North American free trade, Canada, and US trade remedies: an assessment after ten years," The World Economy 23 (no. 1, January 2000), 77-91; Patrick Macrory, NAFTA Chapter 19: A Successful Experiment in International Trade Dispute Resolution, C.D. Howe Institute Commentary 168 (Toronto, September 2002).
32. GATT, Basic Instruments and Selected Documents, 40th Supplement (Geneva, 1995), 358.
33. US International Trade Commission (USITC), Softwood Lumber from Canada, Pub. no. 2468, December 1991.
34. Federal Register 57, (no. 103, 28 May 1992).
35. USITC, Softwood Lumber from Canada, Pub. no. 2530, July 1992.
36. United States, Omnibus Trade and Competitiveness Act of 1988, 19 USCA, sec. 1677 (5) (B).
37. Federal Register 54, 23379
38. See, in particular, William D. Nordhaus, "The impact of stumpage charges on prices and trade flows in forest products," Appendix A in Memorandum Concerning Alleged Stumpage Subsidies and Preferentiality, submitted on behalf of the Government of Canada, 18 February 1992; William D. Nordhaus and Robert E. Litan, "Empirical analysis of the effect of stumpage on timber harvesting: a British Columbia case study," Attachment B in Supplemental Submission submitted on behalf of the Government of Canada, 5 March 1992.
39. See, in particular, William D. Nordhaus, "The impact of stumpage charges on prices and trade flows in forest products," Appendix A in Memorandum Concerning Alleged Stumpage Subsidies and Preferentiality, submitted on behalf of the Government of Canada, 18 February 1992; William D. Nordhaus and Robert E. Litan, "Empirical analysis of the effect of stumpage on timber harvesting: a British Columbia case study," Attachment B in Supplemental Submission submitted on behalf of the Government of Canada, 5 March 1992.
40. FTA, Article 1904 Binational Panel Review USA-92-1904-01, Certain Softwood Lumber Products from Canada, Decision of the panel, 6 May 1993.
41. US DOC, ITA, Certain Softwood Lumber Products from Canada Redetermination Pursuant to Binational Panel Remand, 17 September 1993.
42. FTA, USA-92-1904-01, Certain Softwood Lumber Products from Canada, Decision of the panel on remand, 17 December 1993. For more on this, see George Hoberg and Paul Howe, "Law, knowledge, and national interests in trade disputes: the case of softwood lumber," Journal of World Trade 34 (no. 2 March 2000), 109-30. On the specificity test in US law, regulations, and practice, with numerous references to the softwood lumber case, and to other FTA/NAFTA panel decisions, see John A. Ragosta and Howard M. Shanker, "specificity of subsidy benefits in US Department of Commerce countervailing duty determinations," Law and Policy in International Business 25 (1994), 639-83.
43. FTA, USA-92-1904-01, Certain Softwood Lumber Products from Canada, Decision of the panel on remand, 17 December 1993. For more on this, see George Hoberg and Paul Howe, "Law, knowledge, and national interests in trade disputes: the case of softwood lumber," Journal of World Trade 34 (no. 2 March 2000), 109-30. On the specificity test in US law, regulations, and practice, with numerous references to the softwood lumber case, and to other FTA/NAFTA panel decisions, see John A. Ragosta and Howard M. Shanker, "specificity of subsidy benefits in US Department of Commerce countervailing duty determinations," Law and Policy in International Business 25 (1994), 639-83.
44. FTA, USA-92-1904-01, Certain Softwood Lumber Products from Canada, Decision of the panel on remand, 17 December 1993. For more on this, see George Hoberg and Paul Howe, "Law, knowledge, and national interests in trade disputes: the case of softwood lumber," Journal of World Trade 34 (no. 2 March 2000), 109-30. On the specificity test in US law, regulations, and practice, with numerous references to the softwood lumber case, and to other FTA/NAFTA panel decisions, see John A. Ragosta and Howard M. Shanker, "specificity of subsidy benefits in US Department of Commerce countervailing duty determinations," Law and Policy in International Business 25 (1994), 639-83.
45. FTA, Binational Panel Review USA-92-1904-02, Softwood Lumber from Canada, Decision of the panel reviewing the final determination of the US International Trade Commission, 26 July 1993.
46. USITC, Softwood Lumber from Canada, First remand, Pub. no. 2689, October 1993.
47. FTA, USA-92-1904-02, Softwood Lumber from Canada, Decision of the panel on review of the remand determination of the US International Trade Commission, 28 January 1994.
48. USITC, Softwood Lumber from Canada, Second remand, Pub. no. 2753, March 1994.
49. FTA, USA-92-1904-02, Softwood Lumber from Canada, Decision of the panel on review of the US International Trade Commission's second remand determination, 6 July 1994. For more on the legal issues over the US injury determinations and the panel remands, see Mary Y. Pierson, "Recent developments in the US/Canada softwood lumber dispute," Law and Policy in International Business 25 (1994), 1187-1203.
50. FTA, USA-92-1904-02, Softwood Lumber from Canada, Decision of the panel on review of the US International Trade Commission's second remand determination, 6 July 1994. For more on the legal issues over the US injury determinations and the panel remands, see Mary Y. Pierson, "Recent developments in the US/Canada softwood lumber dispute," Law and Policy in International Business 25 (1994), 1187-1203.
51. Under the FTA and NAFTA, only in exceptional circumstances can a panel decision be challenged, namely, if a panellist is guilty of gross misconduct, bias or serious conflict of interest, or if the panel has seriously departed from a fundamental rule of procedure or manifestly exceeded its authority (the latter since NAFTA specifies failure to apply the appropriate standard of review), and that one of these factors has significantly influenced the panel's decision and threatens the integrity of the binational review process. An Extraordinary Challenge Committee (ECC) composed of three judges is then established and renders its decision (FTA/NAFTA, art. 1904.13).
52. FTA, ECC USA-94-1904-01, Certain Softwood Lumber Products from Canada, Committee opinions of 3 August 1994.
53. For a discussion of the extraordinary challenge procedure in the softwood lumber case, see Davey, Pine & Swine, 232-44. Davey's book also includes an exhaustive treatment of the political and legal aspects of Softwood Lumber in.
54. See, among others, Charles M. Gastle and Jean-G. Castel, "should the North American Free Trade Agreement dispute settlement mechanism in antidumping and countervailing duty cases be reformed in the light of softwood lumber III" Law and Policy in International Business 26 (no. 3, 1995), 823-96. On the allegations of national bias and the FTA/NAFTA panel mechanism, see Matthew Stevenson, "Bias and the NAFTA dispute panels: controversies and counter-evidence," The American Review of Canadian Studies 30 (spring 2000), 19-33.
55. See, among others, Charles M. Gastle and Jean-G. Castel, "should the North American Free Trade Agreement dispute settlement mechanism in antidumping and countervailing duty cases be reformed in the light of softwood lumber III" Law and Policy in International Business 26 (no. 3, 1995), 823-96. On the allegations of national bias and the FTA/NAFTA panel mechanism, see Matthew Stevenson, "Bias and the NAFTA dispute panels: controversies and counter-evidence," The American Review of Canadian Studies 30 (spring 2000), 19-33.
56. United States, Uruguay Round Agreements Act (URAA), 1994.
57. For more on the Uruguay Round subsidy negotiations, see Patrick J. McDonough, "subsidies and countervailing measures," in Terence P. Stewart, ed, The GATT Uruguay Round: A Negotiating History (1986-1992) (Deventer/Boston: Kluwer 1993), 53.
58. A subsidy, however, is not considered specific if eligibility is limited on the basis of explicit, verifiable, and objective criteria (i.e., criteria or conditions that are neutral, do not favour certain enterprises over others, are economic in nature and horizontal in application, such as number of employees or size of enterprise), so long as eligibility is automatic and the criteria are strictly adhered to. "Agreement on subsidies and countervailing measures" (ASCM), in Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, 15 December 1993.
59. URAA, sec. 251(3).
60. WTO, Canada - Measures Affecting the Export of Civilian Aircraft, Report of the Appellate Body WT/DS70/AB/r, 1999.
61. URAA, sec. 251(3).
62. Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. 316, 103d Cong., 2d sess., 1994. On the US implementation of the Uruguay Round results, see Terence P. Stewart, ed, The World Trade Organization: The Multilateral Trade Framework For the 21st Century and US. Implementing Legislation (Washington: American Bar Association. Section of International Law and Practice 1996). On the implications of the US interpretation and implementation of the Uruguay Round results on subsidies, see Gary N. Horlick and Peggy A. Clarke, "The 1994 WTO subsidies agreement," World Competition 17 (no. 4, June 1994), 41-54; Gilbert Gagné, The WTO Subsidies Agreement: Implications for NAFTA, Occasional paper 45 (Ottawa: Centre for Trade Policy and Law March 1998), 19-22.
63. Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. 316, 103d Cong., 2d sess., 1994. On the US implementation of the Uruguay Round results, see Terence P. Stewart, ed, The World Trade Organization: The Multilateral Trade Framework For the 21st Century and US. Implementing Legislation (Washington: American Bar Association. Section of International Law and Practice 1996). On the implications of the US interpretation and implementation of the Uruguay Round results on subsidies, see Gary N. Horlick and Peggy A. Clarke, "The 1994 WTO subsidies agreement," World Competition 17 (no. 4, June 1994), 41-54; Gilbert Gagné, The WTO Subsidies Agreement: Implications for NAFTA, Occasional paper 45 (Ottawa: Centre for Trade Policy and Law March 1998), 19-22.
64. Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. 316, 103d Cong., 2d sess., 1994. On the US implementation of the Uruguay Round results, see Terence P. Stewart, ed, The World Trade Organization: The Multilateral Trade Framework For the 21st Century and US. Implementing Legislation (Washington: American Bar Association. Section of International Law and Practice 1996). On the implications of the US interpretation and implementation of the Uruguay Round results on subsidies, see Gary N. Horlick and Peggy A. Clarke, "The 1994 WTO subsidies agreement," World Competition 17 (no. 4, June 1994), 41-54; Gilbert Gagné, The WTO Subsidies Agreement: Implications for NAFTA, Occasional paper 45 (Ottawa: Centre for Trade Policy and Law March 1998), 19-22.
65. Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. 316, 103d Cong., 2d sess., 1994. On the US implementation of the Uruguay Round results, see Terence P. Stewart, ed, The World Trade Organization: The Multilateral Trade Framework For the 21st Century and US. Implementing Legislation (Washington: American Bar Association. Section of International Law and Practice 1996). On the implications of the US interpretation and implementation of the Uruguay Round results on subsidies, see Gary N. Horlick and Peggy A. Clarke, "The 1994 WTO subsidies agreement," World Competition 17 (no. 4, June 1994), 41-54; Gilbert Gagné, The WTO Subsidies Agreement: Implications for NAFTA, Occasional paper 45 (Ottawa: Centre for Trade Policy and Law March 1998), 19-22.
66. Inside us Trade, 16 December 1994, 1, 27-8.
67. Softwood Lumber Agreement between the Government of Canada and the Government of the United States of America (Canada, Treaty series 1996/16). The SLA was formally signed in May 1996 with application retroactive to 1 April. On the SLA negotiations and provisions, see Inside US Trade, 22 December 1995, 1, 16-7; 2 February 1996, 1, 19-20; 23 February 1996, 3-4; 5 April 1996, 3ff; 12 April 1996, 11-3.
68. Gordon Ritchie, Wrestling with the Elephant: The Inside Story of the Canada-US Trade Wars (Toronto: Macfarlane Walter & Ross 1997), 212.
69. For more information on these issues, see Canada, News Release No. 191, 30 August 1999; News Release No. 40, 30 March 2001.
70. For more information on these issues, see Canada, News Release No. 191, 30 August 1999; News Release No. 40, 30 March 2001.
71. Inside US Trade, 8 October 1999, 1, 17-8; 21 April 2000, 6-9; 2 June 2000, 17; 3 November 2000, 10-1; 2 March 2001, 1, 8-9, 21-4; International Trade Reporter, 20 April 2000, 642.
72. Inside US Trade, 8 October 1999, 1, 17-8; 21 April 2000, 6-9; 2 June 2000, 17; 3 November 2000, 10-1; 2 March 2001, 1, 8-9, 21-4; International Trade Reporter, 20 April 2000, 642.
73. Inside US Trade, 6 April 2001, 1, 17-9.
74. USITC, Softwood Lumber from Canada, Pub. no. 3426, May 2001; Inside US Trade, 1 June 2001, 13.
75. USITC, Softwood Lumber from Canada, Pub. no. 3426, May 2001; Inside US Trade, 1 June 2001, 13.
76. Federal Register 66 (17 August 2001), 43186; Canada, News Release No. 118, 10 August 2001; International Trade Reporter, 16 August 2001, 1284-5; Inside US Trade, 17 August 2001, 1, 12-3.
77. Federal Register 66 (17 August 2001), 43186; Canada, News Release No. 118, 10 August 2001; International Trade Reporter, 16 August 2001, 1284-5; Inside US Trade, 17 August 2001, 1, 12-3.
78. Federal Register 66 (17 August 2001), 43186; Canada, News Release No. 118, 10 August 2001; International Trade Reporter, 16 August 2001, 1284-5; Inside US Trade, 17 August 2001, 1, 12-3.
79. Federal Register 66 (17 August 2001), 43186; Canada, News Release No. 118, 10 August 2001; International Trade Reporter, 16 August 2001, 1284-5; Inside US Trade, 17 August 2001, 1, 12-3.
80. Federal Register 66, (6 November 2001), 56062; International Trade Reporter, 1 November 2001, 1749; Inside US Trade, 2 November 2001, 4-5.
81. Federal Register 66, (6 November 2001), 56062; International Trade Reporter, 1 November 2001, 1749; Inside US Trade, 2 November 2001, 4-5.
82. Federal Register 66, (6 November 2001), 56062; International Trade Reporter, 1 November 2001, 1749; Inside US Trade, 2 November 2001, 4-5.
83. Federal Register 67, (2 April 2002), 15545; Canada, News Release No. 28, 22 March 2002; Inside US Trade, 29 March 2002, 3-4.
84. Federal Register 67, (2 April 2002), 15545; Canada, News Release No. 28, 22 March 2002; Inside US Trade, 29 March 2002, 3-4.
85. Federal Register 67, (2 April 2002), 15545; Canada, News Release No. 28, 22 March 2002; Inside US Trade, 29 March 2002, 3-4.
86. USITC, Softwood Lumber from Canada, Pub. no. 3509, May 2002; Canada, News Release No. 46, 2 May 2002; News Release No. 53, 17 May 2002.
87. USITC, Softwood Lumber from Canada, Pub. no. 3509, May 2002; Canada, News Release No. 46, 2 May 2002; News Release No. 53, 17 May 2002.
88. USITC, Softwood Lumber from Canada, Pub. no. 3509, May 2002; Canada, News Release No. 46, 2 May 2002; News Release No. 53, 17 May 2002.
89. Federal Register 63, 65348ff.
90. Stumpage fees refer to the rights to Canadian companies to harvest timber on state-owned land. The US has argued that these are set by provincial governments at artificially low prices or below market value. Tenure policies cover the length of time Canadian companies are given exclusive cutting rights to an area. These guarantee companies a supply of timber. Mandatory minimum cut laws require producers to log and process a determined amount of timber, as the US argues, regardless of market demand. For the US, all these practices do not correspond to open and competitive markets and result in unfair subsidization and/or dumping. For a discussion of the multiple aspects of Canada's forestry practices, including US trade pressures, see Michael Howlett, ed, Canadian Forest Policy: Adapting to Change (Toronto: University of Toronto Press 2001).
91. Inside US Trade, International Trade Reporter, various issues.
92. Inside US Trade, International Trade Reporter, various issues; US DOC, Proposed Analytical Framework. Softwood Lumber from Canada, Draft, 6 January 2003; Federal Register 68, (24 June 2003), 37456.
93. Inside US Trade, International Trade Reporter, various issues; US DOC, Proposed Analytical Framework. Softwood Lumber from Canada, Draft, 6 January 2003; Federal Register 68, (24 June 2003), 37456.
94. Inside US Trade, International Trade Reporter, various issues; US DOC, Proposed Analytical Framework. Softwood Lumber from Canada, Draft, 6 January 2003; Federal Register 68, (24 June 2003), 37456.
95. Inside US Trade, 2 June 2000, 1, 17-8; 4 May 2001, 1, 22-4; International Trade Reporter, 25 May 2000, 816; 5 July 2001, 1045-6; WTO, United States - Measures Treating Export Restraints as Subsidies, complaint by Canada, Panel report, WT/DS194/R, 29 June 2001.
96. Inside US Trade, 2 June 2000, 1, 17-8; 4 May 2001, 1, 22-4; International Trade Reporter, 25 May 2000, 816; 5 July 2001, 1045-6; WTO, United States - Measures Treating Export Restraints as Subsidies, complaint by Canada, Panel report, WT/DS194/R, 29 June 2001.
97. Inside US Trade, 2 June 2000, 1, 17-8; 4 May 2001, 1, 22-4; International Trade Reporter, 25 May 2000, 816; 5 July 2001, 1045-6; WTO, United States - Measures Treating Export Restraints as Subsidies, complaint by Canada, Panel report, WT/DS194/R, 29 June 2001.
98. Inside US Trade, 26 January 2001, 1-2; International Trade Reporter, 18 July 2002, 1275-6.
99. Inside US Trade, 26 January 2001, 1-2; International Trade Reporter, 18 July 2002, 1275-6.
100. Canada, News Release No. 81, 17 July 2002; WTO, United States - Continued Dumping and Subsidy Offset Act of 2000 - (Byrd Amendment), Panel report, WT/D5234/R, 16 September 2002; Appellate Body report, WT/DS234/AB/R, 16 January 2003; Inside US Trade, 17 January 2003, 1, 16-7.
101. Canada, News Release No. 81, 17 July 2002; WTO, United States - Continued Dumping and Subsidy Offset Act of 2000 - (Byrd Amendment), Panel report, WT/D5234/R, 16 September 2002; Appellate Body report, WT/DS234/AB/R, 16 January 2003; Inside US Trade, 17 January 2003, 1, 16-7.
102. Canada, News Release No. 81, 17 July 2002; WTO, United States - Continued Dumping and Subsidy Offset Act of 2000 - (Byrd Amendment), Panel report, WT/D5234/R, 16 September 2002; Appellate Body report, WT/DS234/AB/R, 16 January 2003; Inside US Trade, 17 January 2003, 1, 16-7.
103. Canada, News Release No. 81, 17 July 2002; WTO, United States - Continued Dumping and Subsidy Offset Act of 2000 - (Byrd Amendment), Panel report, WT/D5234/R, 16 September 2002; Appellate Body report, WT/DS234/AB/R, 16 January 2003; Inside US Trade, 17 January 2003, 1, 16-7.
104. International Trade Reporter, 9 May 2002, 853-4; 3 October 2002, 1711.
105. International Trade Reporter, 19 September 2002, 1612-3; Canada, News Release No. 2, 8 January 2003.
106. International Trade Reporter, 19 September 2002, 1612-3; Canada, News Release No. 2, 8 January 2003.
107. Canada, Softwood Lumber. Canada's Legal Actions. WTO Challenges, available at www.dfait-maeci.gc.ca/eicb/softwood/wto_challenges-en.asp.
108. WTO, United States - Preliminary Determinations with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS236/R, 27 September 2002; United States - Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS257/R, 29 August 2003; International Trade Reporter, 3 October 2002, 1709-10; Inside US Trade, 4 October 2002, 11-2.
109. WTO, United States - Preliminary Determinations with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS236/R, 27 September 2002; United States - Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS257/R, 29 August 2003; International Trade Reporter, 3 October 2002, 1709-10; Inside US Trade, 4 October 2002, 11-2.
110. WTO, United States - Preliminary Determinations with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS236/R, 27 September 2002; United States - Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS257/R, 29 August 2003; International Trade Reporter, 3 October 2002, 1709-10; Inside US Trade, 4 October 2002, 11-2.
111. WTO, United States - Preliminary Determinations with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS236/R, 27 September 2002; United States - Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, Panel report, WT/DS257/R, 29 August 2003; International Trade Reporter, 3 October 2002, 1709-10; Inside US Trade, 4 October 2002, 11-2.
112. International Trade Reporter, 1 August 2002, 1355-6.
113. Canada, Softwood Lumber. Canada's Legal Actions. NAFTA Challenges, available at www.dfait-maeci.gc.ca/eicb/softwood/nafta_challenges-en.asp.
114. NAFTA, USA-CDA-2002-1904-02, Softwood Lumber from Canada (AD), Decision of the panel, 17 July 2003; Canada, News Release No. 101, 17 July 2003; Inside US Trade, 25 July 2003, 1-3.
115. NAFTA, USA-CDA-2002-1904-02, Softwood Lumber from Canada (AD), Decision of the panel, 17 July 2003; Canada, News Release No. 101, 17 July 2003; Inside US Trade, 25 July 2003, 1-3.
116. NAFTA, USA-CDA-2002-1904-02, Softwood Lumber from Canada (AD), Decision of the panel, 17 July 2003; Canada, News Release No. 101, 17 July 2003; Inside US Trade, 25 July 2003, 1-3.
117. NAFTA, USA-CDA-2002-1904-03, Softwood Lumber from Canada (CVD), Decision of the panel, 13 August 2003; Canada, News Release No. 114, 13 August 2003; Inside US Trade, 5 September 2003, 11-2.
118. NAFTA, USA-CDA-2002-1904-03, Softwood Lumber from Canada (CVD), Decision of the panel, 13 August 2003; Canada, News Release No. 114, 13 August 2003; Inside US Trade, 5 September 2003, 11-2.
119. NAFTA, USA-CDA-2002-1904-03, Softwood Lumber from Canada (CVD), Decision of the panel, 13 August 2003; Canada, News Release No. 114, 13 August 2003; Inside US Trade, 5 September 2003, 11-2.
120. NAFTA, USA-CDA-2002-1904-07, Softwood Lumber from Canada (Injury), Decision of the panel, 5 September 2003; Canada, News Release No. 127, 5 September 2003.
121. NAFTA, USA-CDA-2002-1904-07, Softwood Lumber from Canada (Injury), Decision of the panel, 5 September 2003; Canada, News Release No. 127, 5 September 2003.
122. International Trade Reporter, 8 November 2001, 1803, available at www.nafta-law.org.
123. For more on this, see Marc Benitah, "Softwood lumber: exact significance of the recent Canadian victory before the WTO and prospects in the context of the pending second lumber case," The Estey Centre Journal of International Law and Trade Policy 3 (no. 2, summer 2002), 346-56, available online: esteyjournal.com.
124. Inside US Trade, 21 March 2003, 23.
125. See a recent backgrounder publication from the C.D. Howe Institute, authored by Lawrence L. Herman, Softwood Lumber: The Next Phase, 6 December 2001, which recommends that Canada press ahead on all available legal fronts with a view to ensuring an outcome to set a better precedent for trade disputes such as Softwood Lumber.
126. Robert Howse, Settling Trade Remedy Disputes: When the WTO Forum is Better than the NAFTA, C.D. Howe Institute Commentary 111 (Toronto, July 1998).
127. Inside US Trade, 25 October 2002, 3; 20 December 2002, 15-6; 14 February 2003, 22; Le Soleil, 30 August 2003, B1-2.
128. Inside US Trade, 25 October 2002, 3; 20 December 2002, 15-6; 14 February 2003, 22; Le Soleil, 30 August 2003, B1-2.
129. Greg Anderson, "The compromise of embedded liberalism, American trade remedy law, and Canadian softwood lumber: can't we all just get along?" Canadian Foreign Policy 10 (no. 2, winter 2003)