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NAFTA- Softwood Lumber

North American Free Trade Agreement (NAFTA) is a free trade agreement between Canada, USA and Mexico. NAFTA was signed on December, 17 1992 and entered into force on January 1, 1994. It replaced the Canada-US Free Trade Agreement.

The main purpose of NAFTA was the removal of barriers on trade of goods among the member countries. Half barrier restrictions were lifted immediately, and the rest were taken gradually over 14 years.

Canada is one of the main exporters of forest products. The total value of exports in this sector amounted to $42.9 billion in 2002. Now Canada exports 250 different species of timber industry in 175 countries around the world. More than half of Canada’s forest products are exported to the United States (about 80% of total exports), the rest – mainly goes to European countries (8%) and Japan (7%). In general, exports of timber products provide 11% of the total export earnings of the country, and it is the Canadian share of 19% in the global market.

The main types of export products in Canada are: soft wood lumber (24% of exports by value), paper and cardboard (19%), newsprint (15%) and cellulose (16%).

At the same time, being the world’s largest exporter of softwood lumber (17,2% of world exports), the main market of which is in the United States, Canada has faced a tough anti-dumping legislation in the country, where the government is trying to restrict access to its market of cheap Canadian wood. Therefore, the legitimacy of the US restrictions adopted by Canada has been now contested in the structures of the World Trade Organization and NAFTA. In 2002, the US established a fee of 8,43% of sales on the export of softwood from Canada because they believe there are artificially low rents charged by the state with the loggers, who thus provide actual subsidizing logging operations in Canada. This view does not find understanding in Canada and in the last eight years, the Canadian government has spent $27 million on highly qualified lawyers who challenge this situation in the US government, as well as in the arbitration of the International Trade Commission under the NAFTA.

In 2004, it was announced that the Federal Government of Canada has allocated $ 0 million on the awareness campaign of the issue, which it intends to hold in the United States. In March 2004, the international commission of the WTO, set up by Canada’s request, concluded that the incompatibility of the anti-dumping policy of the United States with the WTO requirements, the same conclusion reached in April 2004 by NAFTA experts, however, the question of the removal of export duties on softwood lumber from Canada remains open.

North American Free Trade Agreement (NAFTA) is a free trade agreement between Canada, USA and Mexico. NAFTA was signed on December, 17 1992 and entered into force on January 1, 1994. It replaced the Canada-US Free Trade Agreement.

The main purpose of NAFTA was the removal of barriers on trade of goods among the member countries.

Assignment ID
100000953
Type
CREATED ON
31 July 2016
COMPLETED ON
2 August 2016
Price
$41
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