Hopes fade on swift resolution of US-Canada softwood lumber deal

Prior to meeting members of Quebec’s forestry sector, Foreign Affairs Minister Chrystia Freeland stated that the positions of the US and Canada are still quite far apart.

SPOKANE (Scrap Monster): A settlement on softwood lumber deal between the US and Canada doesn’t appear that easy. Even as negotiations and bilateral discussions are on, the two sides seem to be quite far apart in reaching a consensus agreement that would boost cross border trade between the two countries. Meantime, Canadian Minister of Natural Resources is reportedly on a mission to explore diversified markets for Canadian lumber.

Prior to meeting members of Quebec’s forestry sector, Foreign Affairs Minister Chrystia Freeland stated that the positions of the US and Canada are still quite far apart, which obviously rules out the possibility of a swift resolution to the long-pending trade crisis. Freeland reiterated the federal government’s position that duties on Canadian exporters are punitive and without any base. The remarks come just after Raymond Chretien, Quebec's softwood lumber envoy has expressed optimism of resolving the lumber trade dispute before the commencement of NAFTA re-negotiation by mid-August this year. At the same time, Chretien had warned that a failure to arrive at a deal before mid-August may prolong the lumber dispute between the two countries for a number of years.

Meantime, a delegation of Canadian forestry industry belonging to United Steelworkers (USW) held a meeting with US politicians on June 12^th. Bob Matters, USW Canadian Wood Council Chair, who heads the nine-member delegation, urged the need for an amicable settlement, as it would benefit both Americans and Canadians. The members are scheduled to meet with several Members of Congress and Senators to chalk out a solution to the dispute. Matters demanded fair access to the US market and noted that Canada is now at disadvantage when compared with other exporters of wood products into the US.

As part of efforts to diversify market for Canadian lumber, Jim Carr, Natural Resources Minister had recently participated in the official launch of Sino-Canadian Low-Carbon Eco-District in Tianjin Province of China- a project which extensively uses Canadian lumber and green technology principles in construction of green buildings. Also, Carr had announced a financial assistance package of $867 million to softwood lumber industry and employees working in the sector in an attempt to shield them from the punitive tariffs imposed by the US administration on Canadian softwood exports.

During late-April, the US administration had imposed tariffs up to 24% on Canadian softwood lumber. A duty of 24.12% was applied to West Fraser, followed by Canfor (20.26%), Tolko (19.50%) and Resolute (12.82%). All other Canadian exporters were subject to 19.88% duties with the exception of J.D Irving whose duty was fixed at 3.02%. The anti-dumping duties to be announced June 23 is expected to take the tariffs to over 30%.

The lumber trade dispute between the two countries is dated back to 1982. The two countries had signed a bilateral agreement in September 2006. The original seven-year agreement had an optional provision to extend for a period of two years upon consensus by both parties. Accordingly, the deal which came to an end in 2013 was extended until 2015. As per the terms of the deal, parties were prohibited from engaging in trade actions for one-year grace period, which has already come to an end on 12th October, 2016.

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