International Trade Committee on May 11th, 2023

[Michael Owen]

Yes, that's right. The U.S. industry, at that time.... After a series of litigation losses, we essentially reached an agreement with them. It endured up to about 2013, and then it was extended for two years after that as well.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Okay. This is starting to become clearer to me.

You're hoping the litigation strategy again informs the same sort of movement in the same direction: Win some litigation and hopefully compel them to waive their rights yet again, so we can reach another agreement. However, we're now in this chicken-and-egg situation because these appellate bodies—specifically, the WTO one—have not been constituted, and the United States is stonewalling on reconstituting it.

Is that fair?

[Aaron Fowler]

I think that's a fairly good encapsulation of the general approach we're taking, but I would say it's our litigation across all the fora—not just the WTO—we'd like to see move forward to support that approach.

[Arif Virani, Liberal, Parkdale—High Park, ON]

At one point, you said there's a problem with the WTO body. Does the issue about not finding decision-makers apply equally to NAFTA and CUSMA, or are there decision-makers in place for NAFTA and not for CUSMA?

Could you clarify that?

[Michael Owen]

On a point of clarification, when they moved NAFTA chapter 19 into the new CUSMA agreement, it became CUSMA chapter 10. When you're talking about one.... It's the exact same thing.

Yes, we have constituted NAFTA panels right now. The first panel is going to hold its first hearing in early June. That's the anti-dumping panel. The countervailing duty panel will hold a hearing at the end of September. We have started constituting the CUSMA panels for the first administrative review. We have a partially constituted panel, and we're currently in discussions with the U.S. on that.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Mr. Cannings took you through a bit of WTO reform. Obviously, we have the Ottawa Group administering and actually leading on WTO reform.

Has this issue about the appellate bodies been raised in that venue, in particular? If it has been, has there been any traction on the issue of constituting appellate bodies?

[Aaron Fowler]

Thank you for the question.

Yes, the Ottawa Group is focused on different aspects of WTO reform and modernization to improve the operation of that institution and ensure it continues to be relevant and at the centre of global trade policy.

The appellate body impasse is obviously a very big issue. Underpinning it is U.S. interest in reform of that particular aspect of the institution. The Ottawa Group has discussed modernization and reform specifically related to the DSB in at least some of its meetings.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

That's your time.

I'm going to ask my colleagues to indulge me. With the chair's prerogative, I want to ask two quick questions.

Mr. Fowler, have softwood lumber disputes with the United States ever been resolved through litigation, whether it's at the WTO or under NAFTA, or has it always been a political solution?

[Aaron Fowler]

Thank you for the question.

With the first lumber dispute in 1982, Canada prevailed, but it prevailed at the stage of the investigation, so no duties were ultimately put in place by the United States. Subsequent rounds of the dispute have always been a combination of litigation and a negotiated agreement that managed trade between Canada and the U.S. in the softwood lumber sector for a period of time.

[The Vice-Chair, Conservative, Kyle Seeback]

Ultimately, it was an agreement between the countries. It wasn't that the litigation resulted in the United States just giving up and then there was a negotiated solution that took place.

[Aaron Fowler]

We won Softwood Lumber I, but it wasn't international trade litigation. We were appearing before the U.S. Department of Commerce and the U.S. International Trade Commission.

[The Vice-Chair, Conservative, Kyle Seeback]

Softwood Lumber IV and all the other ones resulted with a direct agreement between Canada and the United States. Is that correct?

[Aaron Fowler]

Yes.

[The Vice-Chair, Conservative, Kyle Seeback]

There was a negotiated settlement.

[Aaron Fowler]

That is correct.

[The Vice-Chair, Conservative, Kyle Seeback]

I think Softwood Lumber IV was from 2002 to 2006. That's how long the dispute lasted. Is that correct?

[Aaron Fowler]

My colleague is telling me it was 2001. Yes, at that point, we put the agreement in place that remained in force until 2016.

[The Vice-Chair, Conservative, Kyle Seeback]

Softwood Lumber V is 2016 to 2023-plus.

[Aaron Fowler]

That's TBD.

[The Vice-Chair, Conservative, Kyle Seeback]

That's great. Thanks very much.

Thanks to all the witnesses for coming today. We appreciate your testimony.

I will adjourn the meeting with the consent of the committee.

[Some hon. members]

Agreed.

[The Chair]

The meeting is adjourned.