About International Trade Disputes

Introduction

When two trading nations have divergent laws and practices governing a certain trade, trade disputes result. There are numerous trade conflicts going on right now between different nations all around the world. Trade conflicts exist, among instance, between China and the United States between North America and Europe. In this paper, one item on the international trade issues between Canada and the United States will be summarized and analyzed (Miller, 2016).

Summary of the Softwood Lumber Dispute

The author discusses the resolution of a trade dispute between the United States and Canada, where the latter had claimed that softwood in Canada is subsidized by the federal and provincial governments, in the article Canada and the US are in dispute over softwood, popularly known as the lumber dispute. The article “Canada–U.S.A softwood lumber dispute” is about a dispute between how the prices should be set (Shongwe, 2017). The Canadian government and lumber industry dispute is, based on various factors, including that Canadian timber is provided to such a wide range of industries, and that lack of specification The lumber industry employs thousands and small trade restrictions result in job losses and also revenue.

Analysis

The author has presented his facts very well providing the numerical evidence where necessary. The lumber industry in Canada is controlled by provincial governments as they own most of the forest. This is very sad because the wood prices are set administratively rather than at a competitive market price. In the United States, softwood lumber industry is privately controlled, and the owners form an effective political lobby (Miller, 2016). The United States claims that the Canadian arrangement constitutes an unfair subsidy, and is thus subject to U.S. trade remedy laws, where foreign trade benefiting from subsidies can be subject to a countervailing duty tariff, to offset the subsidy and bring the price of the commodity back up to market rates.

Conclusion

The lumber dispute was one of the greatest trade disputes whose effect is still felt today. Trade disputes should amicably be resolved to avert economic losses such as job cuts from escalating to huge losses and possibly termination of the trading relationship.

References

Shongwe, M. N. (2017, March). The Fragmentation of the Multilateral Trading System: The Impact of Regionalism on WTO Law. In Amsterdam Law Forum (Vol. 9, No. 1, pp. 3-41).

Miller, E. (2016). From Log Export Restrictions to a Market-Based Future.