Figure 2. Current monthly wood prices (current dollars) and export rules under the 2006 Softwood Lumber Agreement The adoption of the 2006 Softwood Lumber Agreement (SLA) ended the fourth Great Wood War.3 Both countries had addressed a number of domestic and international legal challenges prior to the signing of the ALS. The United States collected dumping and countervailing duties on Canadian imports of coniferous timber, which affected U.S. wood consumers and created general tensions between the two neighbouring countries. THE ALS applied export duties or quotas for Canadian coniferous wood that was delivered to the United States when the price of softwood products in the United States was below a specified level. THE ALS expired on October 12, 2015, nine years after it came into effect. However, in accordance with the terms of the agreement, commercial defence rights could not be invoked until after 13 October 2016. In November 2016, the U.S. lumber industry launched a new petition on the countervailing tax, which launched the fifth dispute, Lumber V, according to observers.

But the federal government negotiated with the United States to revise the agreement to address some of the concerns of the softwood industry. The conifer wood industry is vital to the Canadian economy and employs thousands of people. The forestry industry has helped create direct jobs for about 232,700 people. [3] Indirectly, 289,000 people were recruited[3] to work in other areas that depend on Canada`s forests. These include engineering, transportation and construction. Such an advantage of this industry can be taken into account in the GDP of the country, which added $21.2 billion in 2014. [4] This represented about 1.3% of GDP by volume. [5] Canada has the largest trade surplus relative to forest products ($21.7 billion in 2015). [6] As the largest market, the United States is heavily dependent on Canadian timber. The needs of the United States outweigh the domestic supply. Canada is also growing rapidly in the Asian market, with China being the second largest importer.

In 2015, the United States accounted for 69% of Canada`s conifer lumber exports. This is an increased share of Canada`s conifer wood exports, which reached the lowest level in 2011, at only 54%. In the same year, China accounted for 21%. In the short term, Canadian conifer wood exporters benefit from a higher gain of one dollar less. The decision was unanimously taken for the four-member trade body, which is stagnating over the petition filed by the U.S. Lumber Coalition. Canada immediately took legal action against the decision under the NAFTA Dispute Settlement Mechanism, Chapter 19,[40] in an official statement in which it stated that the decision was « unfair, unjustified and disturbing. » [41] Canada has already won several NAFTA challenges in the past with respect to conifer wood issues. [40] In March 2018, Canada intensified the WTO dispute and asked the international trade body to establish an adjudication body to assess its dispute with the United States. [42] Canadian officials argued that talks with the United States had failed.

At the heart of the dispute is the assertion that the Canadian timber industry is unfairly subsidized by the federal and provincial governments, since most of the wood in Canada is owned by provincial governments. Prices for timber harvesting (cutting tax) are set administratively and not by the competitive market, the standard in the United States. In the United States, conifer wood lands are private property and owners are an effective political lobby.