U.S. Trade Representative Robert Lighthizer on Monday released more details on the Trump administration's plan to renegotiate the North American Free Trade Agreement with Canada and Mexico.
As part of the renegotiation process, U.S. officials hope to lower the trade deficit by improving access to its agricultural and manufacturing businesses in Canada and Mexico. The administration said it is also targeting "unfair subsidies, market-distorting practices" and "burdensome restrictions on intellectual property."
The proposed changes, according to The Washington Post, also include removing from NAFTA the existing Chapter 19 dispute resolution mechanism, which permits companies to appeal domestic court trade decisions to a special panel.
The U.S. Lumber Coalition is one industry group that came out in favor of the proposed changes to NAFTA, in particular the one eliminating the dispute-panel appeal process. The Coalition said in a statement that it undermines the ability of the U.S. to enforce its trade laws.
The organization is also on board with administration's attempts to deal with the Canadian softwood subsidy issue. In recent months, the U.S. Department of Commerce applied separate fees in response to investigations as to whether Canadian producers were being unfairly subsidized by their government and were then "dumping" lumber product in the U.S. — that is, selling it at below-market prices — a violation of U.S. International Trade Commission rules.
The combined duties range from 17.41% to 30.88%, depending on the producer, and are expected to be finalized by early next year.
Canada has denied the dumping allegations and accused the U.S. lumber industry of protectionism. The U.S. Lumber Coalition said Canada's subsidies hurt the U.S. softwood lumber industry.
Canada and the U.S. have been embroiled in disagreements over softwood imports for decades. This has led to both countries exploring other options for the sale and purchase of lumber. Still, according to The Hill, Canada exports approximately 80% of its softwood lumber to the U.S., an amount that accounts for more than 30% of the country's softwood lumber market.
In September, the National Association of Home Builders reported that representatives of the U.S. lumber industry were engaged in talks with Chilean officials about the possibility of importing softwood from that country. Chile currently has a 1.22% share of the U.S. lumber market.
The lack of a softwood lumber deal could impinge on NAFTA talks, according to The Hill, which are expected to begin later this summer. Officials were hoping one would already be in place by the time the talks started. CBC reports that efforts at negotiating such a deal have been limited but could build steam this summer.