Soft Wood Lumber Dispute Case Study
Soft Wood Lumber and Doman Industries
Soft Wood Lumber Disputes
Simmered more than 20 years, but spilled over May 2002
Dispute from May 2002 to July 2006
Canada’s View
Timber is owned by provincial government, which charge a ‘stumpage fee’ (charge to cut the trees down)
Subsidized because it is used for many industries
United States’ View
Practice competitive auction, and claims Canadian provision unfair
Soft Wood Lumber Disputes (con’t)
Tentative Agreement reached in April 2006
US would lift duties if Canadian lumber stayed in a certain price range
If the price went lower than that range, a mix of export tax/quota regime would be implemented on imports to the US
US would return over 80% of the $5 billion of the duties collected …show more content…
Reduce inventory, cut costs, and restructure
Able to do first 2, but board refused the third
Doman Industries (con’t)
2002
Tariffs emplaced by US hit Doman Industries hard ($4 million in first month)
65% of Doman Industries sales were in the US
Nov 2002 - $1 billion debt went into court-ordered protection from its creditors
2002 to …show more content…
North American Free Trade Agreement
Levels of Involvement in International Business
International Level
Sets out laws of how countries deal with each other
Federal Level
Controls the import and export laws of Canada
Provincial Level
Deals with the business rules and taxes
Municipal Level
Deals with zoning bylaws with in the township
Deals with environmental issues, health and safety, and taxes
Company Level
Deals with the day to day business and sales
Levels of Involvement in International Business (con’t)
The Canadian Softwood Lumber represents all the levels in the International Business
Environmental issues and Taxation at all levels
Health and Safety issues; Air quality emission; and Subsidies at Federal and Provincial levels
Reforestation and Waste Regulations at Provincial and Municipal levels
Many regulations are duplicated at all levels so it is beneficial when these are harmonized
Quiz #3
How many levels are involved in International Trade?
4 5 6
Barriers to International Trade
The barriers to International Trade are the tariffs that add costs to imported goods and are one out of several trade policies that a country can enact
Soft Wood Lumber Disputes
Simmered more than 20 years, but spilled over May 2002
Dispute from May 2002 to July 2006
Canada’s View
Timber is owned by provincial government, which charge a ‘stumpage fee’ (charge to cut the trees down)
Subsidized because it is used for many industries
United States’ View
Practice competitive auction, and claims Canadian provision unfair
Soft Wood Lumber Disputes (con’t)
Tentative Agreement reached in April 2006
US would lift duties if Canadian lumber stayed in a certain price range
If the price went lower than that range, a mix of export tax/quota regime would be implemented on imports to the US
US would return over 80% of the $5 billion of the duties collected …show more content…
Reduce inventory, cut costs, and restructure
Able to do first 2, but board refused the third
Doman Industries (con’t)
2002
Tariffs emplaced by US hit Doman Industries hard ($4 million in first month)
65% of Doman Industries sales were in the US
Nov 2002 - $1 billion debt went into court-ordered protection from its creditors
2002 to …show more content…
North American Free Trade Agreement
Levels of Involvement in International Business
International Level
Sets out laws of how countries deal with each other
Federal Level
Controls the import and export laws of Canada
Provincial Level
Deals with the business rules and taxes
Municipal Level
Deals with zoning bylaws with in the township
Deals with environmental issues, health and safety, and taxes
Company Level
Deals with the day to day business and sales
Levels of Involvement in International Business (con’t)
The Canadian Softwood Lumber represents all the levels in the International Business
Environmental issues and Taxation at all levels
Health and Safety issues; Air quality emission; and Subsidies at Federal and Provincial levels
Reforestation and Waste Regulations at Provincial and Municipal levels
Many regulations are duplicated at all levels so it is beneficial when these are harmonized
Quiz #3
How many levels are involved in International Trade?
4 5 6
Barriers to International Trade
The barriers to International Trade are the tariffs that add costs to imported goods and are one out of several trade policies that a country can enact