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The softwood lumber dispute between Canada and the United States is one of the longest running trade disputes in history, and possibly the longest running trade dispute ever relating to a single topic. In one form or another, the dispute has been underway for nearly four decades. Notwithstanding its legal and economic significance, the softwood lumber dispute is not widely followed or understood outside of Canada and the United States. After reviewing the origins and history of the softwood lumber dispute, this article seeks to identify some of the broader implications of the dispute as they may affect governments and industries in other parts of the world. The article contends that existing subsidy disciplines as set forth in the WTO's Agreement on Subsidies and Countervailing Measures have an uneasy and uncertain relationship to disputes concerning access to natural resources and international trade in goods derived from natural resources, such as softwood lumber. The SCM Agreement's concepts of "financial contribution", benefit, and injury to the domestic industry of the importing country are particularly difficult to reconcile with sovereign natural resource arrangements. The softwood lumber dispute is best understood not as a traditional dispute about the injurious effects of subsidies, but as a form of managed trade effected through periodic trade remedy investigations and negotiated settlements of those investigations.
Key Words : Softwood Lumber, SCM agreement, Natural resource subsidies, Managed Trade
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