A resolution to the Canada-US softwood lumber dispute may be on the horizon following a NAFTA ruling on August 31, 2004 ordering the United States International Trade Commission (ITC) to reverse its decision that softwood lumber from Canada threatened economic harm to producers in the U.S.

At the core of this issue is whether or not US producers suffered a 'material injury'. According to US trade law, punitive duties for countervailing and anti-dumping may only be put in place if there is an affirmative threat or actual "material injury" determination. Without this determination the US will have to revoke their order, stop collecting duties, and return over $2 billion USD in duties that have been collected to date.

Even if the ITC disagrees with the NAFTA Panel's decision, it has no choice but to comply with the orders within this stated 10 day timeframe.

"This NAFTA ruling supports the arguments that the federal government, provincial governments, and industry have made all along," said Halvar Jonson, Minister of Alberta International and Intergovernmental Relations. "The U.S. lumber industry's vulnerability was a result of factors other than Canadian softwood lumber."

However, this does not necessarily mean that the fight is over. The Canadian Lumber Trade Council (CLTA) believes that the Coalition may demand that the U.S. file an "extraordinary challenge" to the panel decisions, based on what the CLTA calls "frivolous" the allegations that the panel is biased and exceeded its authority.

Source: BC LumberTrade Council

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