US claims unfair subsidies undercut its lumber companies.
“The U.S. Department of Commerce’s decision to impose punitive anti-dumping and countervailing duties on Canadian softwood lumber producers is unfair, unwarranted and deeply troubling,” said a statement issued by Global Affairs Canada.
It is the same charge Canada leveled against the U.S. earlier this year under the dispute mechanism in the North American Free Trade Agreement.
As a first step to move the litigation forward, Canada has asked that consultations be held with American officials under the auspices of the WTO.
The U.S. claims that Canadian softwood lumber is subsidized by the government because most forests from which the wood is harvested is owned by the provinces in Canada. In the United States, the woodlots are predominately privately held.
As a result, American lumber companies maintain that Canada can sell lumber to the U.S. at reduced prices, providing unfair competition.
The U.S. Department of Commerce agreed with the American lumber producers and earlier this month imposed a tariff averaging 20.83 percent on Canadian lumber imports.
In 2016, the U.S. imported about $5.66 billion in softwood lumber from Canada. The wood is used mostly in house construction.