U.S., Canada finalize agreement on softwood lumber trade

U.S., Canada finalize agreement on softwood lumber trade    Chief U.S. and Canadian trade negotiators signed off on an agreement that should end a 20-year dispute over softwood lumber.
   The 80-page agreement, initialed on July 1, incorporates much of what was reached between the countries on April 27.
   “This agreement resolves concerns on both sides of the border and allows us to focus on the larger positive trade relationship binding our two countries,” said U.S. Commerce Secretary Carlos M. Gutierrez, in a statement.
   Under the agreement, the United States and Canada will end all litigation over softwood lumber. The agreement provides for unrestricted trade when prices are more than $355 per thousand board feet, a condition that has largely existed in the past several years.
   When prevailing prices are less than $355 per thousand board feet, Canadian exports will be subject to a combination of export charges or volume limits that increase in steps the lower the market drops, with a maximum export charge at 15 percent when prices fall below $315 per thousand board feet, the Office of the U.S. Trade Representative said.
   Of the estimated $5 billion in duties collected since 2002, most of it will be returned to Canadian interests. About $1 billion will remain in the United States. The U.S. lumber companies that brought the trade complaints against Canada will receive $500 million, while $450 million will fund community assistance projects and $50 million will be used to set up a binational industry council, with an advisory board comprising representatives from the Canadian and U.S. lumber industries.
   The agreement also establishes an 18-month process to develop substantive criteria for Canadian policy reforms that could exempt provinces from export charges and quotas and provides the basis for a long-term answer to the dispute, the USTR said.
   In addition, the agreement includes provisions to address potential import surges from Canada, provide effective dispute settlement, require extensive information exchange and define special treatment for low- and high-value products.
   The agreement will now undergo a legal review with signatures expected in August. No U.S. legislation is required, but the Canadian parliament must approve the export charge system after it returns in September. USTR expects the agreement to enter into force this fall.