Softwood Lumber Agreement 1996

June 4, 2023 By Admin

The Softwood Lumber Agreement of 1996, also known as the SLA, was a bilateral agreement between the United States and Canada that aimed to regulate the trade of softwood lumber products between the two countries. The agreement was signed on September 12, 1996, and took effect on October 1, 1996, and lasted for five years until it expired on March 31, 2001.

The main objective of the SLA was to establish a framework for the regulation of softwood lumber trade between the two countries. The agreement set out a number of measures to ensure fair trade practices, including export taxes, export quotas, and a dispute resolution mechanism.

Under the agreement, Canadian softwood lumber exports to the US were subjected to a tax of 15% of the export value to offset the difference between the lower Canadian stumpage fees (the amount that a timber company pays for the right to harvest timber on public land) and the higher US market-based fees. The agreement also established quotas on Canadian softwood lumber exports, which were calculated based on the market share of Canadian exports to the US over a certain period.

The SLA also established a dispute resolution mechanism, which was aimed at ensuring that any disputes arising from the agreement could be resolved in a fair and efficient manner. The mechanism was based on a binational panel system that would be composed of experts from both countries, with a neutral chairperson.

The SLA was seen as a significant achievement in terms of regulating the trade of softwood lumber between the US and Canada. The agreement provided a stable framework for the trade of softwood lumber, and helped to prevent trade disputes between the two countries.

However, the agreement was not without controversy. Some American lumber producers argued that the SLA did not go far enough in protecting US interests, and that Canadian lumber exports continued to harm the US industry. Consequently, there were several legal challenges to the agreement, and when it expired in 2001, negotiations for a new agreement began immediately.

In conclusion, the Softwood Lumber Agreement of 1996 was an important bilateral agreement between the US and Canada, aimed at regulating the trade of softwood lumber products between the two countries. While not perfect, the agreement was a significant achievement in terms of establishing a stable framework for trade between the two countries, and helped to prevent trade disputes. Despite the controversy surrounding the agreement, it remains an important chapter in the history of US-Canada trade relations.