WTO Dispute Settlement Panel Overreach & Reform

An August 2020 World Trade Organization (WTO) dispute settlement panel report in the U.S. countervailing duty case against unfairly subsidized Canadian lumber imports represents the latest example of judicial overreach at the WTO seeking to undermine and dismantle the U.S. trade laws. This type of WTO overreach makes it harder for U.S. producers and workers to address unfair trade.

Canada’s unfair trade practices in softwood lumber are well documented, and the harm these practices cause to the U.S. forestry industry is undisputed.

Canada, along with numerous other countries seeking unfettered access to the U.S. market for their subsidized and unfairly traded exports, must not be allowed to use a flawed WTO dispute settlement system, that has experienced significant mission creep, to dismantle the U.S. trade laws.

Canada and Other WTO Member Countries Are Using the WTO to Dismantle the U.S. Trade Laws

Canada and other WTO member countries are systematically using the WTO dispute settlement system to dismantle the U.S. trade laws piece by piece, and impose new obligations on the United States that were never agreed to, or achieved, in negotiations. For example:

  • The WTO in its panel decisions has: (1) added to U.S. obligations and diminishing U.S. rights, (2) addressed issues it had no authority to address, (3) taken actions it had no authority to take, and (4) interpreted WTO agreements in ways not envisioned by the WTO Members who entered into those agreements.
  • The WTO through its actions has attempted to appropriate the role of the U.S. Congress. The WTO may not, by the very terms of the WTO Agreements, usurp the role of the U.S. Congress to make U.S. law or to create new treaty obligations for the United States. Canada and a number of other WTO member countries have pushed the WTO to usurp the role of the U.S. Congress.
  • The original WTO Agreement prohibits WTO Appellate Body reports to be precedential. Unlike the U.S. judicial system, appellate body reports are not allowed to, and thus must not, dictate how future cases are to be resolved. This latest panel, like others before it, treated WTO appellate body reports as essentially binding precedent, which the United States has repeatedly made clear is not allowed.

Enforcing U.S. Trade Law is Critical to Industry Growth and Jobs

Since 2016, U.S. producers and workers have been able to increase their production and shipments of softwood lumber by over 8 billion board feet. This is due in part because the U.S. has enforced trade rules that have leveled the playing field. This means more U.S. lumber being produced by U.S. workers to supply the U.S. housing market and support communities throughout the nation. Leveling the playing field against Canada’s unfair trade practices isn’t just about fairness, it’s about jobs right here at home.

Enforcing the softwood lumber case against Canada is critical for U.S. workers, the entire U.S. forestry industry, and thousands of U.S. communities who depend on a vibrant domestic industry.

When WTO panels overstep, they put all of this at risk.

What Must the U.S. Government Do?

The U.S. Lumber Coalition strongly supports all past and current efforts by the USTR to combat the judicial activism of WTO panels. We urge the U.S. government to take action on the following:

  • Reject all attempts by WTO panels to diminish U.S. rights and attempts to deviate and expand from original WTO obligations.
  • Seek meaningful WTO reforms.
  • Continue to focus on fully enforcing the U.S. trade laws against any and all unfairly traded imports.

Through the continued enforcement of the U.S. trade laws, the U.S. industry and its workers will be able to continue to grow to its full potential – and thus continue to supply more U.S. lumber, produced by U.S. workers, to supply U.S. housing, and support U.S. communities across the country. U.S. producers through their determination, innovation and grit have added some 10 billion board feet of lumber production since 2016 and counting. This is a success story now put at risk by the latest WTO panel overreach.

Latest Industry Coverage

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Woodworking Network: Lumber executive says softwood duties are not causing housing unaffordability

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The Hill: Lumber duties not the cause of housing unaffordability

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Troy Messenger: Rex Lumber preparing to become fully operational

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Bangor Daily News: Tougher trade policies can give Maine’s sawmills a chance to thrive

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The News-Review: Not All Duties Are Bad

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The Hill: Free trade only works when fair trade is enforced

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Maine’s sawmills finally can compete against Canada’s subsidized lumber

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Trump’s timber tariffs divide the construction industry

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US lumber producers see huge opportunity, rush to expand

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Skyrocketing prices, demand for new homes signal uptick in Maine lumber market

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The Era of American Complacency on Trade Is Over

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Canada crossing fine line between fair and unfair trade

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Herrera Beutler Applauds Finding That U.S. Lumber Imports Are Negatively Impacted by Canadian Imports

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US locks in duties on Canada’s softwood lumber industry

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U.S. Panel Locks in Final Duties on Canadian Softwood Lumber

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Canadian lumber subsidies harmed U.S. producers, Trade Commission rules

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Tariffs on softwood lumber from Canada set by U.S. Department of Commerce

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US slaps tariffs on Canadian softwood lumber

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U.S. imposes final duties on Canadian softwood lumber

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LePage’s Canada-first message hurts Maine sawmills

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NAFTA revamp talks will start next month in Washington

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Lumber Tariffs Could Lead to New Softwood Agreement