March 4, 2008
No. 48
A tribunal appointed under the Rules of the London Court of International Arbitration (LCIA) today issued its ruling in the dispute over the interpretation of the "adjustment factor." The "adjustment factor" is a technical provision in the 2006 Canada-United States Softwood Lumber Agreement (SLA) which may affect the way certain export measures under the Agreement are calculated. This dispute was referred to the LCIA on August 13, 2007, by the U.S. government.
The adjustment factor is outlined in paragraph 14 of Annex 7D of the Agreement. The tribunal has found that the adjustment factor applies only to the provinces that have chosen the quota option.
The Honourable David Emerson, Minister of International Trade and Minister for
the Pacific Gateway and the Vancouver-Whistler Olympics, made the following statement:
"We are pleased that the tribunal agreed with our interpretation that the adjustment factor is not applicable to British Columbia and Alberta. However, we are disappointed that the tribunal did not agree with our position that adjustments were to commence as of July 1, 2007.
"While Canada believes that it has fully complied with the Agreement, we respect the tribunal's ruling. We appreciate that the issues in this arbitration involve a complex technical matter.
"The tribunal heard from both parties on the interpretation of the adjustment factor. Today's decision provides clarity with respect to the implementation of the SLA in the future.
"This is the first stage of arbitration. The next stage will determine any remedy that may be applicable. We will continue to defend Canadian interests throughout this process.
"Dispute settlement is a normal feature of any trade agreement. Under the SLA, the parties agreed to use the LCIA to obtain speedy rulings on differences of views between parties.
"Canada will abide by its obligations under the Agreement and will continue to work closely with the United States to resolve disagreements when they arise.
"Canada remains committed to the SLA, which ended a long-standing dispute and has brought certainty and stability to the lumber industry."
The Softwood Lumber Agreement came into force on October 12, 2006. It is a seven-year agreement, with an option to renew for two additional years.
More information on the Softwood Lumber Agreement and the arbitration process can be found at: www.dfait-maeci.gc.ca/eicb/softwood/menu-en.asp.
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For further information, media representatives may contact:
François Jubinville
Director of Communications
Office of the Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics
613-992-7332
Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
www.international.gc.ca/index.aspx
