Breathing room for U.S.-Canada softwood lumber talks

The Commerce Department has postponed its final determinations for the antidumping and countervailing duty investigations into softwood lumber imports from Canada until Nov. 14.    The Commerce Department has postponed its final determinations for the antidumping and countervailing duty investigations into softwood lumber imports from Canada until Nov. 14.
   The decision, which was made by the department on Monday, gives both the United States and Canada more breathing room to work out a new agreement to this long-smoldering trade spat.
   “I remain hopeful that we can reach a negotiated solution that satisfies the concerns of all parties,” Commerce Secretary Wilbur Ross said in a statement. “This extension could provide the time needed to address the complex issues at hand and to reach an equitable and durable suspension agreement.”
   Under U.S. law, Commerce may postpone an antidumping duty final determination for up to 135 days after the publication of the preliminary determination. Further, because Commerce’s countervailing duty investigation has been aligned with its antidumping investigation, that final determination will also be announced at the later deadline.
   Both sides hope to finalize a new softwood lumber agreement before settling into what are expected to be difficult negotiations to update the North American Free Trade Agreement between the United States, Canada and Mexico.
   In early August, the Canadian government proposed to cap its share of the U.S. lumber market to 30 percent, but the U.S. Lumber Coalition, which represents U.S. lumber interests in this trade dispute, rejected the proposal. Disagreement also remains on how U.S. softwood lumber producers will respond to shortfalls in the domestic supply chain under a 30 percent import cap from Canada.
   On April 28 and June 30, respectively, Commerce published its preliminary determinations in its latest countervailing and antidumping investigations of softwood lumber from Canada. In response, the Canadian government said Commerce’s preliminary determinations are “based on a flawed rationale,” and warned that if the duties are applied, they will cause economic harm to workers on both sides of the border.
   The U.S. International Trade Commissions (ITC) is currently conducting a parallel investigation to determine if the American producers are harmed by Canadian softwood lumber exports. If Commerce’s final determinations are affirmative, and the ITC makes an affirmative final injury determination, Commerce will issue antidumping and countervailing duty orders. If the ITC does not find that U.S. producers have been harmed, then the investigations will end, and no duties will be collected.
   The 2006 Softwood Lumber Agreement (SLA), which according to the Canadian government provided “stability and predictability for industry on both sides of the border,” expired on October 12, 2015. However, U.S. and Canadian softwood lumber interests have occasionally accused each other of abuses throughout the SLA’s duration.