“On January 10, 2008, the Government of Canada proposed
creation of a $1 billion Community Development Trust, including aid to
Canada’s forestry sector. In
response to concerns in the United States about this announcement, on January
15, 2008, Ambassador Susan C. Schwab sent a letter to Canadian Trade Minister
David L. Emerson seeking Canada’s assurance that any funds disbursed to the
forestry sector from the Community Development Trust will be used in a manner
consistent with Canada’s obligations under the U.S.-Canada Softwood Lumber
Agreement (SLA). The United
States remains committed to the SLA, and hopes Canada
will demonstrate its commitment to the Agreement as it considers this
proposal.”
BACKGROUND:
The U.S.-Canada Softwood Lumber Agreement entered into force
on October 12, 2006. Under the SLA, the Government of Canada committed not
to take any action that circumvents the SLA,
including actions that reduce or offset the Agreement’s export measures, such as
providing new subsidies to producers or exporters of Canadian softwood lumber
products.
On March 30, 2007, the United
States requested formal consultations with
Canada to resolve concerns
regarding Canada’s implementation of the export
measures, in particular the operation of the Agreement’s surge mechanism and
quota volumes, as well as several federal and provincial assistance programs
that benefit the Canadian softwood lumber industry. After formal
consultations failed to resolve these concerns, the United
States requested international arbitration
under the terms of the Agreement on August 13, 2007. That arbitration
challenges Canada’s application of the import
surge mechanism and quota volumes. The United States expects to file a second request
for arbitration shortly challenging a number of assistance programs implemented
by Quebec and Ontario.
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