global trade

US appeals WTO ruling in lengthy Canada lumber dispute

Agence France-Presse

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US appeals WTO ruling in lengthy Canada lumber dispute

A sign of the World Trade Organization is seen at its headquarters in Geneva, Switzerland, on December 10, 2019. - WTO announced the launch of "intensive" political negotiations to salvage the appellate branch of the body's internal court, which is set to collapse under US opposition. (Photo by Fabrice COFFRINI / AFP)


(UPDATED) Filing an appeal before the World Trade Organization is tricky, since the appellate branch of its dispute settlement body stopped functioning in December 2019 after years of relentless US opposition

The United States said on Monday, September 28, it had appealed a World Trade Organization (WTO) ruling that favored Canada in a long-standing battle over lumber imports, describing the decision as “deeply flawed.”

Ottawa said it was “disappointed” by the US move, its trade minister Mary Ng saying in a statement that the US duties have caused “unjustified harm” to Canada’s forestry sector and US consumers, and “are impeding economic recovery on both sides of the border.”

The WTO’s dispute settlement body (DSB) – long a target of attacks by Washington – agreed last month with Canada’s complaints that Washington had violated trade rules when imposing duties on lumber widely used in construction.

US Trade Representative (USTR) Robert Lighthizer had immediately slammed the decision as “erroneous” and said they “prevent the United States from taking legitimate action in response to Canada’s pervasive subsidies for its softwood lumber industry.”

And on Monday, the US notified the body of its decision to appeal the panel report, according to a written version of comments made to a DSB meeting.

Filing an appeal before the WTO is tricky, however: the DSB’s appellate branch, sometimes called the supreme court of world trade, stopped functioning last December after years of relentless US opposition.

Washington accuses the court of major overreach and has blocked appointments of new judges, leaving it without the quorum needed to hear cases. 

By filing an appeal with nowhere for the appeal to be heard, Washington has in effect blocked Canada’s ability to move forward and request financial compensation for the US activities deemed illegal by the DSB.

“We are open to discussions with Canada on the way forward in this dispute,” a US representative told Monday’s meeting.

Ng vowed to defend Canada’s forestry sector, noting that “US duties on Canadian softwood lumber have time and again been found to be unfair and unwarranted.” 

“We will keep challenging these duties through all available avenues,” she said, including through the new USMCA continental trade pact with the US and Mexico.

The DSB report last month upheld most of Ottawa’s complaints against the US, saying Washington’s claims the government was providing illegal subsidies to lumber producers were based on miscalculated prices and transactions like purchase of electricity that did not qualify as subsidies.

It was the 9th complaint filed by Ottawa over Washington’s use of anti-dumping and countervailing duty measures – long the subject of anger from American trading partners.

In the latest battle in the 40-year-old dispute, the US in 2017 imposed import duties of 18% on Canadian softwood lumber imports to compensate for what it said was “dumping” of the product, meaning it was sold below market prices and received government subsidies, thereby hurting US producers.

USTR said imports of softwood lumber products from Canada in 2016 totaled $5.78 billion. –

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