U.S., Canada Haven't Given Up on Lumber Pact

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By Rossella Brevetti

Sept. 8 — Negotiations to reach a new softwood lumber pact are ramping up in advance of a meeting planned between Canadian Trade Minister Chrystia Freeland and U.S. Trade Representative Michael Froman.

Canadian Trade Minister Chrystia Freeland discussed the issue with U.S. Trade Representative Michael Froman in Hangzhou, China Sept. 4 on the sidelines of the Group of 20 summit, Christine Constantin, spokeswoman for the Embassy of Canada in Washington, told Bloomberg BNA.

Freeland expects to meet with Froman again “shortly,” Constantin said in a Sept. 7 e-mail. No date has been confirmed yet, she said.

“We continue to explore all possible approaches. Any agreement must reflect the realities of the softwood lumber sector, including differences in communities across Canada,” said Alex Lawrence, spokesman for Freeland.

Since the softwood lumber pact expired, departmental officials have held conference calls and/or meetings on a regular basis with provincial and territorial governments, industry representatives, and other stakeholders.

In recent months the level of engagement has intensified and calls are now being held bi-weekly, Constantin said.

“As the Prime Minister and President jointly stated while in Ottawa, we are committed to continuing negotiations in an effort to achieve a durable solution on softwood lumber,” she said.

USTR Cites Intensive Work

U.S. and Canadian negotiators are working intensively to accomplish the agreement consistent with a joint statement issued by President Barack Obama and Prime Minister Justin Trudeau, a U.S. Trade Representative spokesman told Bloomberg BNA.

At the North American Leaders' Summit on June 29, Obama and Trudeau said a new accord would be designed to maintain Canadian imports at or below an agreed U.S. market share, the spokesman said. The previous softwood lumber deal included export quotas for Canadian producers.

Both sides want an agreement by mid-October when a one year standstill on bringing new trade cases expires. U.S. producers can bring dumping and subsidy cases against Canadian softwood lumber imports when the standstill expires.

Senate Finance Committee ranking Democrat Ron Wyden (Ore.) recently said in an editorial, which ran in the Oregonian, that litigation is inevitable absent a new agreement. In the past, Wyden said, Canada has “recognized the need to agree on border measures to address the consequences of timber prices set by government decree rather than the free market.”

A new U.S.-Canada softwood lumber pact must be flexible and reflect the commercial realities of every Canadian province to get the country's support, Canada's Ambassador David MacNaughton has said. Canada is committed to working with the U.S. for a durable solution that creates greater predictability on the share of Canadian softwood in the U.S. market, he said.

The U.S. side is pushing for a quota on lumber imports from Canada, while Canada has sought different options for various provinces, (122 ITD, 6/24/16).

Exports From Chile

U.S. home builders, meanwhile, wrapped up four days of talks with Chilean government, trade and industry officials Sept. 8 aimed at boosting exports of softwood lumber to the U.S., the National Association of Home Builders announced Sept. 8.

While U.S. home builders would prefer buying wood products from domestic producers, the U.S. lacks the domestic capacity to meet its lumber demand, the NAHB said. Canada is the largest supplier of softwood lumber into the U.S.

Numerous trade disputes on softwood lumber from Canada have “left the American housing sector in the lurch,” the NAHB said.

“As U.S. and Canadian negotiators discuss the parameters of a new agreement, NAHB believes that it must be mindful of the U.S. housing market to ensure American consumers have access to a stable, dependable and affordable lumber supply,” the statement said.

Chile currently holds just 1.22 percent of the U.S. lumber market but NAHB sees growth potential because of the U.S.-Chile Free Trade Agreement.

To contact the reporter on this story: Rossella Brevetti in Washington at rbrevetti@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

For More Information

The statement from the National Association of Home Builders is available at http://src.bna.com/ip5.

Sen. Wyden's editorial is available at http://src.bna.com/ip7.

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