Canada-U.S. Relations Priority for Trudeau Government

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By Peter Menyasz and Jeremy Hainsworth

Aug. 22 — Restoring the bilateral relationship with the U.S. is a top priority for the Canadian government, Prime Minister Justin Trudeau said Aug. 22.

Trudeau didn’t mention renewed friction on softwood lumber, but he cited the need to pursue shared economic goals as one of three priorities he will pursue when Parliament resumes sitting Sept. 19.

Canada’s relationship with the U.S. was built on shared values and a “unique kind of economic interdependence, and the ongoing challenges include “trade deals,” Trudeau told reporters at a news conference in Sudbury, Ontario, after a two-day cabinet planning session.

“We’re confident it will continue to be a productive and prosperous one in the years to come,” he said.

The planning session unveiled changes to the structure of the Trudeau cabinet’s committees to reflect the priorities he identified, including turning a subcommittee on Canada-U.S. relations into a full-fledged committee.

International Trade Minister Chrystia Freeland chairs the committee.

Lumber Remains Issue

U.S. lumber prices are off to their biggest rally in more than a decade, touching a 19-month high in late July as demand increased from builders.

However, almost a third of all wood used in U.S. homes comes from the world's top exporter, Canada, where surging shipments have compounded a trade dispute and increased the chances of import tariffs that may top 30 percent. That spells trouble for producers, including West Fraser Timber Co., Canfor Corp., Interfor and Tolko Industries.

Representatives of those companies met recently with officials from the Office of the U.S. Trade Representative in British Columbia, Council of Forest Industries president Susan Yurkovitch told Bloomberg BNA Aug. 19 (161 ITD, 8/19/16).

“The USTR was here exploring what the issues are, hearing directly from the Canadian industry,” Yurkovitch said. “Our government is doing the same with the U.S. Everybody’s working hard to find a resolution.”

Asked what the major issues are, Yurkovitch said the main discussion is around what the framework of a possible agreement with Canada would be.

While the two countries have until October to iron out a new softwood lumber trade agreement to replace one that expired last year, imports are flooding into the U.S., intensifying opposition from U.S. producers who say their northern neighbors get unfair subsidies. Canadian exports accounted for most of the increased demand from U.S. builders this year through April, Bloomberg Intelligence estimates (146 ITD, 7/29/16).

Diminished Hopes

British Columbia Premier Christy Clark told a news conference Aug. 19 she’s not hopeful for an agreement soon. “There’s always a glimmer of hope but as days pass that glimmer dims,” Clark said. “British Columbia will not accept a bad deal for Brit Columbia workers.”

Litigation “is no way to settle these things,” Clark said, adding that a breakdown in negotiations “is a major disruption of our relationship with America.”

The Canadian Chamber of Commerce is pleased the government is focusing on Canada’s most important bilateral relationship, Perrin Beatty, the chamber’s president, said Aug. 22.

It is particularly timely as there will be a new administration in Washington in a few months, with priorities that may be “quite different” from those of President Barack Obama, Beatty told Bloomberg BNA in an e-mail.

“There are a range of issues, including softwood lumber, trade, border management and the environment, all of which are urgent and all of which will require close collaboration. The current government has demonstrated that it understands that managing our relations with the U.S. is critical to both economic and foreign policy success,” he said.

To contact the reporters on this story: Peter Menyasz in Ottawa and Jeremy Hainsworth in Vancouver at

To contact the editor responsible for this story: Jerome Ashton at

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