The Softwood Lumber Dispute and US Allegations of Improper NAFTA Panel Review

Abstract

The dispute over Canadian exports of softwood lumber products to the United States (US) has lasted since 1982 and, so far, has gone through four episodes of litigation. In Lumber IV, the US International Trade Commission (ITC) determined that the US softwood lumber industry was threatened with material injury by reason of dumped and subsidized lumber from Canada. Under the North American Free Trade Agreement (NAFTA), a binational panel concluded, however, that there was no such evidence and directed the ITC to reverse its finding. In its resort to the Extraordinary Challenge Procedure, the US alleged that the injury panel had misapplied the US standard of review. In fact, allegations of improper NAFTA panel review were used by the US in order to justify its non-compliance with adverse binding decisions.