Removing a softwood trade splinter

As NAFTA renegotiations get underway in Washington, Canadian policy makers are looking for a resolution to the long-festering softwood lumber trade dispute between the United States and Canada.     A handful of government officials representing the timber producing Canadian provinces met in Washington Thursday to encourage a “negotiated solution” to the long-simmering softwood lumber trade dispute between the United States and Canada. 
   But the officials warned that the Canadian provinces are also “prepared to proceed with litigation on all fronts if a fair solution cannot be achieved.”
   The Canadian government officials included David Wilkins of New Brunswick, Raymond Chretien of Quebec, Jim Peterson of Ontario, Gary Doer of Alberta, and David Emerson of British Columbia.
   “Canada has demonstrated a willingness to be flexible in these discussions. We have tabled solid offers that respond to U.S. industry demands for a hard defined market share approach. Canada’s proposals would provide predictability to U.S. lumber mills while also ensuring safety valves to protect the U.S. housing and construction sectors in the event that the U.S. market is undersupplied,” the officials said in a joint statement.
   They further cited that the softwood lumber trade dispute is “a diversion from our many areas of alignment and cooperation on trade. As our negotiators join together in working to modernize the North American Free Trade Agreement (NAFTA), now is the time to focus on the future and put this dispute behind us.”
   In addition, Alexandre Cusson, first vice president of the Union of Quebec Municipalities (UMQ), sent a letter to members of the U.S. Senate urging them to press for resolution of the softwood lumber dispute for the economic sake of both Canada and United States.
   “There’s something wrong when the United States is increasing its timber imports from sources in Russia, Germany, or Romania, and at same time Canada is being penalized by the unwarranted imposition of countervailing duties and antidumping tariffs,” Cusson said.
   The U.S. Department of Commerce in June issued an affirmative preliminary determination in the antidumping duty investigation of softwood lumber from Canada, finding that exporters from Canada have sold softwood lumber to the United States at 4.59 percent to 7.72 percent less than fair value. As a result of the determination, the department has instructedU.S. Customs and Border Protection (CBP) to collect cash deposits from importers of softwood lumber from Canada based on these preliminary rates.
   The preliminary antidumping rates are in addition to the preliminary countervailing duty rates that the Commerce Department assessed on softwood lumber April 24. When combined, the applicable duty rates range from 17.41 percent to 30.88 percent.
   However, Commerce also preliminarily determined that it will not assess antidumping and countervailing duties on softwood lumber imports from Canada’s Atlantic Provinces of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
   This latest Commerce Department investigation follows the expiration of the nine-year-old Softwood Lumber Agreement (SLA) Oct. 12, 2015, prior to which battles between the two countries over softwood lumber raged, involving numerous countervailing and antidumping duty investigations, as well as many challenges in the World Trade Organization. The decades’ back-and-forth resulted in a form of stalemate, with neither side able to firmly claim victory, but following the signing of the SLA in 2006, the United States ended its duty collections on Canadian softwood lumber, refunding 81 percent of the duties collected.