Canada’s Triumph: U.S. Surrenders to NAFTA Panel’s Softwood Lumber Judgment

After months of whining by high-level Canadian politicians, the U.S. Commerce Department announced yesterday that the U.S. will comply with a NAFTA tribunal’s decision requiring the reduction or elimination of U.S. duties on Canadian lumber. The U.S. refusal to eliminate these duties had been one of the main sources of friction between the U.S. and Canada and potentially threatened the long-term viability of NAFTA itself.

This is far from the end of this long-running, dispute between the U.S. and Canada over lumber. Big Lumber in the U.S. is deeply disappointed calling the Commerce decision wrongful as well as “unconstitutional.” As I discussed earlier here, Big Lumber has filed a complaint in U.S. district court seeking to have the entire NAFTA Chapter 19 arbitration process declared unconstitutional.

Still, at least Canada can’t complain that the U.S. doesn’t respect NAFTA. Hopefully, the U.S. and Canada can now sit down and negotiate a full settlement of this essentially ridiculous dispute between two governments that should know better.