CUSMA panel review: Canadian softwood lumber

Summary#

A request for a binational panel review was filed on August 31, 2023 under the Canada—United States—Mexico Agreement (CUSMA). The filing asks a CUSMA panel to review a final U.S. trade determination about “Certain Softwood Lumber Products from Canada: Final Results and Final Rescission, in Part, of the Countervailing Duty Administrative Review; 2021” made by the United States Department of Commerce, International Trade Administration.

What it does#

• Starts a binational panel review under Article 10.12 of CUSMA and the Rules of Procedure for Article 10.12 (Binational Panel Reviews).
• The request was filed by:
  • the Government of Canada, and the governments of Alberta, British Columbia, New Brunswick, Ontario, and Québec;
  • industry groups: the Alberta Softwood Lumber Trade Council, the British Columbia Lumber Trade Council, the Conseil de l’industrie forestière du Québec, and the Ontario Forest Industries Association;
  • companies including Canfor Corporation, Fontaine, Inc., Interfor Corporation and Interfor Sales and Marketing Ltd., J.D. Irving, Limited, Resolute FP Canada Inc., Tolko Marketing and Sales Ltd., Tolko Industries Ltd., Gilbert Smith Forest Products, and West Fraser Mills Ltd..
• The U.S. final determination was published in the Federal Register on August 1, 2023.
• The panel review rules set deadlines for participation:
  • a Complaint had to be filed by October 2, 2023 to challenge the U.S. decision on the merits;
  • a Notice of Appearance had to be filed by October 16, 2023 by parties that want to take part without filing a Complaint.
• The panel will consider only the specific legal and factual errors raised in the Complaints and related defenses.

Who's affected#

• Canadian softwood-lumber producers and exporters, including the named companies above.
• Provincial governments and lumber industry trade groups that joined the filing.
• U.S. importers and buyers of Canadian softwood lumber who could face changes in duties or supply conditions.
• Other stakeholders in the forestry and lumber supply chain may notice effects, though the notice does not list them exhaustively.

Why it matters#

• The review could change whether and how countervailing duties apply to Canadian softwood lumber in the U.S. That affects export prices and competitiveness.
• Binational panel review under CUSMA Article 10.12 replaces ordinary domestic court review for this kind of dispute. That can speed up the challenge and focus it on specific legal and factual issues.
• Outcomes could affect jobs and revenues in the forestry sector in Canada and costs for U.S. buyers of Canadian lumber.