Canada Argues CVD on Softwood Lumber Conflicting With USMCA Environment Chapter

Lawyers from BakerHostetler that represent the Conseil de l’industrie forestière du Québec and the Ontario Forest Industries Association are using a Commerce Department comment process for softwood lumber subsidies to argue once again that the countervailing duty case against Canadian lumber exports contradicts the USMCA Environment Chapter commitments and Biden administration environment and social justice priorities.

The comments were submitted Nov. 28, even though the Softwood Lumber Agreement of 2006 that established the regular reports to Congress, and public comment period, has elapsed.

Elliot Feldman and other lawyers from the firm wrote that Assistant U.S. Trade Representative Kelly Milton has not engaged with an earlier letter submitted to the USMCA Environment Committee on these issues.

The Canadian forestry interests argue that some of the programs the Commerce Department has identified as illegal subsidies for softwood lumber exports aren't even for wood, but for paper, but also that "numerous" provincial and federal programs that are being countervailed are about sustainable forestry, combating climate change or advancing the welfare of indigenous people in Canada.

They say these decisions are "in direct conflict with USMCA commitments and the Biden Administration’s environmental policies to combat climate change, foster sustainability, and promote the well-being of Indigenous people."

They said that it's wrong of the U.S. to point to language in the USMCA that says that the treaty "cannot limit or restrict Commerce’s ability to conduct a CVD proceeding in accordance with the Act." They say that taking the environmental considerations into account does not impose new obligations on the U.S. or create additional rights for Canada.