Softwood Lumber Dispute Protectionism

1.0 Introduction
With over $400 Billion in trade last year it is inevitable that Canada and the United States are each others largest trading partners and more importantly, the largest trading relationship in the world. Trade relations between these two countries have amplified during the past decade through the 1994 implementation of the North American Free Trade Agreement (NAFTA). Nevertheless, the trading relationship between these two countries has not always been harmonious. Recent disputes over softwood lumber, beef and wheat have created a fair bit of animosity between Canada and the United States. Although the World Trade Organization (WTO) and even NAFTA have suggested promising dispute resolution provisions, there is still a fair bit of bitterness between these two parties. The focus of this paper is to evaluate the Canada-United States trade relationship and to focus more specifically on the three main commodities of concern; softwood lumber, beef and wheat. The conclusion of the paper will attempt to determine exactly where the future of this relationship lies and which country will fall victim to the Canada-United States trade dispute.
2.0 The Softwood Lumber Dispute- Protectionism or Subsidizing?
"Softwood lumber is one of Canada's largest exports to the United States, with over 19 billion board feet
Durum Growers launched a petition September 2002, asking the U.S. government to initiate countervailing duty and anti-dumping suits against Canadian wheat and durum imports. They allege that the Canadian government unfairly subsidizes Canadian wheat and that Canadian Wheat Board (CWB) "dumps" wheat into the U.S. at below market prices. Both allegations are unfounded. In response to these allegations the United States imposed a 3.94 percent tariff against Canadian exports of durham wheat and Canadian red spring wheat. Evidently these classes of wheat have the highest volume of exports into the