US Declares WTO Victory in Canada Lumber Dispute

A World Trade Organization (WTO) panel upheld the U.S. method for calculating tariffs, and the United States claimed victory in the long-running softwood lumber trade dispute with Canada. Canada brought the case after the United States imposed tariffs on its softwood lumber, after decades of U.S. companies claiming that Canada was dumping or selling lumber at less than fair value. They also contended that Canada has been unfairly subsidizing its expansive lumber industry. However, the WTO panel issued a mixed ruling that sided with Canada on at least one claim, which could force the United States to revisit how it calculates duties depending on an appeals decision. In spite of the ruling, the United States hailed the overall ruling as a victory after it upheld the practice of "zeroing," which the U.S. Commerce Department uses to unmask targeted instances of dumping, or when a foreign exporter tries to undercut U.S. competitors by selling at less than it would in its home market. Targeted dumping often can be concealed by normal transactions, so Commerce "zeros" out transactions where the product is sold at or above fair market value.

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