Canada escalates softwood lumber fight with U.S., asks WTO to step in

Canada plans to ask the World Trade Organization (WTO) to set up an adjudication panel to judge its dispute with the United States over Canadian lumber exports, indicating that talks have failed to resolve the issue and Ottawa is pressing its case.

READ MORE: Reality Check: Has Canada won all past softwood battles?

Canada has submitted the request for a meeting of the WTO’s dispute settlement body on March 27, according to an agenda circulated by the WTO on Friday.

Ottawa launched the complaint in November, saying it would forcefully defend its lumber industry against punitive U.S. tariffs, which it said were “unfair, unwarranted and deeply troubling.”

WATCH: Softwood lumber remains a ‘trade irritant’ between Canada, U.S.: Freeland

It had already started a challenge under the North American Free Trade Agreement’s Chapter 19 dispute settlement mechanism, which the United States wants to remove as part of talks to modernize the regional trade pact the two countries share with Mexico.

READ MORE: U.S. trade panel rules Canadian softwood lumber harms American producers

The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. It has said its duties affect about $5.66 billion worth of imports.

WATCH: Ottawa announces financial aid for softwood lumber industry

The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land. They are lower than fees paid on U.S. timber, which comes largely from private land.

The United States imposed the tariffs after the failure of talks to resolve the decades-long dispute over the lumber trade.

— Reporting by Tom Miles Editing by Gareth Jones