The Canada-United States softwood lumber dispute: A look at the state of certain economic and political indicators and their relationship to the outcome of disputes.

The interests of Canadian softwood lumber exporters were best served when Commerce found no subsidies in the first countervailing duty case (CVD 1). This is the case, given that Canadian softwood producers were not subject to any restrictions, taxes or duties. With countervailing duty 2 (CVD 2), Canada and the U.S. negotiated a Memorandum of Understanding (MOU) which resulted in a 15% export tax on Canadian softwood lumber exports. Certainly, this was less advantageous to Canadian softwood producers than the outcome of CVD 1. In theory, the relative ad/disadvantageousness of countervailing duty 3 (CVD 3) was on par with that of CVD 2. That is, Canadian lumber was subject to conditional access to the U.S. market. Given that countervailing duty 4 (CVD 4) is ongoing, it is impossible to compare the outcome in terms of relative benefit to Canadian softwood exporters. This analysis discerns how the conditions at the launch of CVD 1 differed from those when each of the other disputes was launched. One fixed set of indicators is used to analyze how certain political and economic indicators relate to the outcome of disputes: Market Share, State of U.S. Economy. Uncertainty in Trade Negotiations/Other Bilateral Sectors of Trade and Level of Protectionist Sentiment in U.S. The analysis has shown that, contrary to the initial hypothesis, the indicators do not necessarily contribute a logical explanation for predicting the outcome of disputes.