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May-June-2017

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34 PalletCentral • May-June 2017 palletcentral.com he U.S. and Canada have long disputed over the issue of Canada softwood lumber being imported into the United States. While there are nuances to the issue, the main cause of the disagreement is that much of Canadian softwood forest is publicly owned, compared to most privately owned forest land in the United States. Consequently, the provincial governments of Canada have greater control over stumpage fees, where U.S. lumber producers are subject to supply and demand market forces to set the pricing. With different forces driving price, the two countries continue to disagree over the existence of competitive advantages in the marketplace for softwood lumber. Background The modern framework of the dispute can be traced back to 1982, when the first countervailing duty (CVD) petition was filed by U.S. softwood producers, claiming that Canadian softwood lumber was unfairly subsidized. Nothing consequential came from this petition because of technicalities, but a second petition was filed in 1986, where the International Trade Commission (ITC) and U.S. Department of Commerce (DOC) determined that Canadian lumber was subsidized by a rate of 15%. This determination lead to a memorandum of understanding (MOU) between the two countries until 1991, where Canada agreed to impose an original export tax of 15% on softwood lumber. Canada withdrew from the MOU in 1991, after which came several years of dispute that included required cash deposits and T Industry Thought Leaders Share to Softwood Lumber TRADE Two Sides

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