The Canadian government is signaling it could test the waters of quota-free softwood lumber trade with the U.S., a move expected to reignite a dispute that simmered for decades.
Canadaâ€™s trade minister wouldnâ€™t commit to reaching a deal before the U.S. is allowed to again place tariffs on Canadian softwood lumber. The previous softwood agreement, which included quotas and was struck in 2006, expired in October and a one-year tariff freeze expires this year. â€œWe are very aware of the importance of this industry to Canada,â€ Trade Minister Chrystia Freeland said. â€œWe are working hard to achieve an outcome which is going to be great for the forestry industry across the country. It is a fiendishly complicated issue.â€
Freelandâ€™s comments come as Prime Minister Justin Trudeau heads to the White House to meet with President Barack Obama on Thursday. Freeland and other ministers will join Trudeau, who is the first Canadian leader since 1997 to be afforded a state dinner in Washington. The Obama administration left the door open this week to a new pact on softwood, and the U.S. industry has called on Canada to return to the table and engage in talks. The two countries have also been sparring over country-of-origin labeling rules and supercalendared paper tariffs.
â€œWe are open at this point to exploring all options with Canada,â€ Mark Feierstein, the National Security Councilâ€™s senior director for the western hemisphere, said in a conference call Tuesday. He added he wasnâ€™t â€œabout to put any timelinesâ€ on reaching a new softwood lumber pact.
The softwood dispute dates back to 1982 and stems from an accusation by the U.S. producers that Canadian timber pricing on govt land is artificially low, giving Canadian producers an advantage that should be met by tariffs on the U.S. side.
Since the 2006 deal, negotiated under a previous government, expired in October the countries have been in a one-year hiatus period.
Canada is no longer issuing quotas and exports are increasing, totaling 1.2 billion foot board measure last month, up from 1.1 billion in each of the previous three months.
The U.S. Lumber Coalition has called on Canada to return to the table and said that, if the standstill expires without a new agreement, the U.S. will need to impose new tariffs to offset what the group calls â€œthe unfair advantages provided to Canadian industry.â€
Asked what it would mean if the Canadians let the standstill expire, coalition chairman Charlie Thomas said: â€œI hope they donâ€™t do that.â€
He referred further questions to executive director Zoltan van Heyningen, who replied with an e-mailed statement. The industry group is â€œsupportive of government to government negotiations,â€ van Heyningen said, and hopes talks â€œwill yield an effective, mutually beneficial and sustainable trade agreement before the one year trade case standstill expires.â€