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The US–Canada softwood lumber dispute and the WTO definition of subsidy

Published online by Cambridge University Press:  27 June 2008

GILBERT GAGNÉ  and
FRANÇOIS ROCH
GILBERT GAGNÉ*
Affiliation:
Bishop's University
FRANÇOIS ROCH
Affiliation:
Université de Paris XI
*
*Correspondence to: Associate Professor, Department of Political Studies, Bishop's University, 2600 College Street, Sherbrooke, Québec, CanadaJ1M 1Z7, Email: ggagne@ubishops.ca
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Abstract

In the softwood lumber dispute, the United States argues that Canada's forestry practices, especially the fees charged by provincial governments to private firms to harvest trees on public lands (stumpage rights), result in undue subsidization of Canadian lumber. Within the World Trade Organization, the concept of subsidy is defined as a ‘government financial contribution’ that confers a ‘benefit’ on firms and that is ‘specific’. In US–Softwood Lumber IV, the WTO authorities ruled that stumpage rights were specific and constituted a financial contribution through the provision of a good (timber). However, in order to demonstrate whether and to what extent these rights confer a benefit on lumber producers, the United States still has to ensure that its methodology to assess the ‘adequacy of remuneration’ is compatible with WTO provisions and to conduct a satisfactory ‘pass-through’ analysis of the alleged input stumpage subsidy to unrelated downstream lumber producers.

Type
Review Article
Information
World Trade Review , Volume 7 , Issue 3 , July 2008 , pp. 547 - 572
Copyright
Copyright © Gilbert Gagné and François Roch 2008

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