[JURIST] The Appellate Body of the World Trade Organization (WTO) [official website; JURIST news archive] ruled Tuesday that US tariffs on softwood lumber from Canada [JURIST news archive] violate international trade rules. The appellate report [PDF text] reverses April's panel decision favoring the United States [JURIST report], which Canada appealed. The Appellate Body found that the US method of calculating the anti-dumping tariffs, known as zeroing, arrived at artificially high prices because it did not take into account transactions in which Canadian lumber sold at higher prices than US lumber.
The softwood lumber dispute [CBC backgrounder] between the two countries has festered for decades, raising doubt as to the sustainability of the North American Free Trade Agreement [text]. The US Court of International Trade last month ruled that the US must abide by a NAFTA panel ruling [JURIST report] that the US duties were improper. Earlier in the month Canada and the US initialed [Canada PM press release] a softwood lumber trade agreement [PDF text] that would reimburse $4 billion to Canada but would allow US lumber producers to keep $1 billion. The Canadian lumber industry has expressed strong opposition to the deal, however, prompting Canada's international trade minister to suggest the government may refuse to table legislation [Vancouver Sun report] approving the agreement. Reuters has more. Canadian Press has additional coverage.