Negotiations on softwood lumber

The last softwood lumber agreement between Canada and the U.S. expired on Oct. 12, 2015.

When prime minister Justin Trudeau visited the U.S. last March, Trudeau and U.S. president Barack Obama said they were confident that an agreement regarding softwood lumber would be reached soon.

Trudeau and Obama instructed top trade officials of U.S. and Canada to explore all options for solving the trade dispute between the two countries and report back to them within 100 days.

On June 17, 2016, Canada’s minister of international trade Chrystia Freeland and U.S. trade representative Michael Froman released a joint statement saying that “significant differences remain” between the two countries.

“Following this initial 100 days of intensive engagement, the United States and Canada have made significant advances in exploring the key issues and priorities,” says the statement. “While significant differences remain between us, this period of intensive engagement has helped define shared goals and explore options for several key components of any new agreement.”

The statement adds that U.S. and Canadian officials are committed to continuing negotiations in an effort to achieve a durable solution for the trade dispute.

The last softwood lumber agreement between Canada and the U.S. expired on Oct. 12, 2015. The United States will be free to launch trade action against Canada one year after the agreement expired – on Oct. 12, 2016.

According to Steve Zika, Chief Executive Officer of Hampton Affiliates – company that owns Babine Forest Products and Decker Lake Forest Products -, if a deal is not reached before October, there is a risk that the U.S. will file for antidumping or other tariffs, similar to what was in place prior to the last softwood lumber agreement.

“Any additional taxes or tariffs will have a negative effect on individual operations in B.C.,” explained Zika. “Depending on market or economic conditions at the time, these additional costs could result in less operation hours or closures of some facilities.”

Susan Yurkovich, President and CEO of the B.C. Lumber Trade Council, said that if a reasonable agreement cannot be reached, the B.C. Lumber Trade Council is prepared to work alongside the Canadian government to defend the industry against any potential trade actions brought by the United States.

“We continue to believe that a new agreement, if properly designed, can provide certainty and stability for lumber producers on both sides of the border,” said Yurkovich. “An agreement would also support efforts by lumber producers on both sides of the border to grow markets for wood products domestically and offshore.”

The B.C. forest industry is a major contributor to the provincial economy, and supports approximately 145,000 direct and indirect jobs in the province. The province estimates that about 40 per cent of B.C.’s rural communities are dependent on forestry.


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