CUSMA panel request on Canadian softwood lumber

Summary#

A Request for Panel Review was filed with the CUSMA Secretariat on August 31, 2023. The filing asks a binational panel to review a United States final decision about countervailing duties on certain Canadian softwood lumber, a decision published in the Federal Register on August 1, 2023 (88 Fed. Reg. 50103).

What it does#

• Asks for a binational panel review under the Canada—United States—Mexico Agreement (CUSMA) (Article 10.12) instead of a U.S. court review.
• Challenges the U.S. Department of Commerce, International Trade Administration’s final results in the 2021 countervailing duty review for certain softwood lumber products from Canada.
• Lists the parties that filed the request: the Government of Canada, the Governments of Alberta, British Columbia, New Brunswick, Ontario, and Québec, several industry groups (including the Alberta Softwood Lumber Trade Council, British Columbia Lumber Trade Council, Conseil de l’industrie forestière du Québec, and Ontario Forest Industries Association) and many companies such as Canfor Corporation, Interfor Corporation, J.D. Irving, Limited, Resolute FP Canada Inc., Tolko Industries Ltd., Gilbert Smith Forest Products, and West Fraser Mills Ltd.
• Explains procedural deadlines under the binational panel rules:
  • A Complaint must be filed no later than October 2, 2023 to directly challenge the final determination.
  • A Notice of Appearance must be filed by parties who want to participate but do not file a Complaint by October 16, 2023.
• Notes the panel’s review is limited to the legal and factual errors alleged in the Complaints and related procedural or substantive defenses.

Who's affected#

• The named companies and trade groups that filed the request, including Canfor Corporation, Interfor Corporation, J.D. Irving, Limited, Resolute FP Canada Inc., Tolko Industries Ltd., Gilbert Smith Forest Products, and West Fraser Mills Ltd.
• The provincial governments that joined the filing: Alberta, British Columbia, New Brunswick, Ontario, and Québec.
• Broader Canadian softwood lumber exporters and their workers, since the case concerns countervailing duties on exported lumber.
• U.S. importers of Canadian softwood lumber and U.S. producers who are parties to the original U.S. proceeding could also be affected, although the notice focuses on the Canadian-side filing.

Why it matters#

• The panel review could change whether or how countervailing duties are applied to Canadian softwood lumber shipments to the U.S. That can affect prices, export volumes, and jobs in parts of Canada that rely on the forest industry.
• The use of a CUSMA binational panel means this dispute will be decided through the trade-agreement process rather than a U.S. domestic court. The timeline and scope of review are therefore different from ordinary court challenges.
• The outcome is uncertain: the filing starts a review process but does not itself change duties or trade flows.