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Blame game already on as softwood deal expires

American lumber producers say 2006 agreement is outdated; they want new deal.


October 14, 2015
by CANADIAN PRESS

VICTORIA — Officials in Canada and the United States appear to have resumed the acrimonious softwood trade dispute just where they left off in 2006 – with both sides blaming each other for failing to kick start negotiations.

A British Columbia government official said the Americans have ignored Canada’s offers to renew or renegotiate the trade agreement.

But the US Lumber Coalition, which represents American producers, said in a statement Canada has been unwilling to begin talks.

“If Canada continues to stay away from the negotiating table, the United States industry will eventually have no choice but to use our rights under US trade laws to offset the unfair advantages provided to Canadian industry,” said Charlie Thomas, a Mississippi lumber producer, in a coalition statement.

Nobody from the coalition was immediately available for comment. The agreement expired Oct. 12.

The BC official said Canada indicated it was interested in extending or renewing the existing softwood lumber agreement but has yet to receive a response.

The official said it appeared the Americans were focused on other trade deals, including the recent Trans-Pacific Partnership.

Susan Yurkovich of the BC Lumber Trade Council said a renewed or renegotiated softwood-lumber agreement benefits both countries’ lumber industries.

“We think it’s incumbent on both governments to engage in discussions as soon as possible,” she said. “We need to find a way forward for certainty on both sides of the border.”

BC Premier Christy Clark told the legislature last week the Americans have refused to negotiate despite two years of requests.

She said her first topic of discussion with Canada’s prime minister after next week’s federal election will focus on the importance of a renewed lumber deal.

American industry groups have long claimed Canada subsidizes its lumber production.

The 2006 agreement was reached to regulate Canadian softwood exports to the US.
It ended five years of court battles and returned $4 billion in duties collected by the US on Canadian producers, more than half of which – $2.4 billion – was returned to BC companies.

The lumber coalition said in its statement that the 2006 softwood agreement is outdated and the alliance of large and small American lumber producers intends to work with its federal government to reach a new deal.

BC is Canada’s largest producer of softwood lumber, accounting for 55% of the nation’s lumber exports to the US.

The value of BC lumber exports annually to the US is about $3 billion.

The province’s lumber exports to Asia, particularly China, have increased in recent years, but the US remains BC’s top lumber export market.

In 2006, BC lumber exports to the US were valued at $4.3 billion, with lumber exports to China at $82 million. In 2014, BC lumber exports to the United States were $3 billion and $1.43 billion to China.

The expired agreement includes a standstill clause that prevents the US from launching any trade action against Canadian producers for one year.

Yurkovich said the expired deal means dropped export duties on Canadian lumber, but she warns the Americans could be watching for price shifts and use any market changes to influence future negotiations.

© 2015 The Canadian Press

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