Canada (plaintiff) exported a significant amount of SPF dimension lumber, which is lumber made from spruce, pine, and fir, of a certain quality grade and finish. SPF dimension lumber was presented in certain sizes and widely used in platform-house construction. Japan (defendant) adopted a tariff classification that applied different tariff rates to lumber based on the species of tree the lumber was made from. Lumber made from some coniferous trees, including Canada’s SPF dimension lumber, was subject to an 8 percent tariff. As a result, a considerable portion of the lumber imported into Japan from Canada was subject to a customs duty, or tariff, of 8 percent. However, dimension lumber made from other species, including some coniferous trees, qualified for a zero-duty tariff under Japan’s Harmonized Tariff Schedule. Canada challenged this duty and asserted that its SPF dimension lumber should have a zero-tariff duty. Canada argued that, under the most-favored-nation clause in the General Agreement on Tariffs and Trade (GATT), its SPF dimension lumber should have been given the same treatment as other dimension lumber from other countries. Japan asserted that it did not recognize dimension lumber as a classification and that Canada’s goods were properly classified based on the species of trees the lumber was made from. The GATT panel assessed Canada’s claim and issued a decision about whether SPF dimension lumber should be entitled to a lower tariff.