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Summer softwood lumber deal possible

MONTREAL — The softwood lumber dispute with the United States could be resolved before the NAFTA renegotiation gets underway in mid-August, says Quebec's softwood lumber envoy.

Raymond Chretien, former Canadian ambassador to the U.S., said Friday he's optimistic because of recent comments by U.S. Trade Representative Robert Lighthizer that he would like to conclude a deal before discussing the North American Free Trade Agreement.

"I think there is an opening for negotiations," said Chretien, adding that he believes there have been "informal exchanges" between the two governments.

"I have always said that there cannot be an adequate modernization of NAFTA if the softwood lumber conflict is not resolved," he said.

"It will be interesting to see if the Americans have the same view."

The former diplomat acknowledged, however, that the softwood lumber dispute could last for years if a deal isn't reached before NAFTA talks begin with Canada, the United States and Mexico.

Noting his long experience, Chretien said it would be "difficult to carry out two sensitive negotiations simultaneously."

Foreign Affairs Minister Chrystia Freeland didn't respond to questions about Chretien's comments.

Despite the U.S. softwood lumber coalition's claims that the federal government's nearly $900 million support package for the Canadian industry is a subsidy, Chretien said it won't add fuel to the fire in discussions between Ottawa and Washington.

"What's important to remember is that Ottawa has conducted a thorough analysis to ensure that these measures do not contravene rule of NAFTA or the World Trade Organization."

While Ottawa's assistance has been generally welcomed by the forest industry and the provinces, some analysts and experts question whether this plan doesn't give ammunition to the U.S. lobby.

"We believe that (the Canadian plan) validates the U.S. thesis and could result in higher quotas and tariffs in the short term," analyst Paul Quinn of RBC Capital Markets wrote in a report.

On April 28, the U.S. Department of Commerce slapped countervailing import duties as high as 24 per cent on Canadian softwood, arguing Canada unfairly subsidizes its industry by keeping the price of logging artificially low.

A decision on anti-dumping duties is set to be announced June 23 that is expected to add as much as another 10 per cent tariff.

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