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Canada, U.S. Reach Tentative Softwood Lumber Agreement

U.S. officials announced a tentative agreement with Canada to end the long-running softwood lumber dispute.

By IRI Staff
Date Posted: 7/1/2006


        U.S. officials announced a tentative agreement with Canada to end the long-running softwood lumber dispute. The new softwood lumber trade agreement is expected to be finalized within the next few months, a Canadian official said.

        Representatives of the U.S. lumber industry said they could support the tentative pact.     

        However, word of the settlement sparked an uproar in the Canadian Parliament, where opposition leaders accused the Conservative government of Prime Minister Stephen Harper of selling out to the Bush administration.

        Under the terms of the tentative agreement, the U.S. would return about $4 billion of the $5 billion in softwood lumber duties it has collected since the expiration of the previous agreement in 2001. In addition, the U.S. would cease to collect duties on imported Canadian softwood lumber.

        The pact also calls for Canada to give each lumber producing region a choice of paying an export tax or paying a lower export tax if the region adheres to an export quota.

        The proposed agreement would last for seven years and then could be renewed or renegotiated.

        The pact is viewed – on both sides of the border – as favoring U.S. lumber producers.

        Harper’s political enemies criticized it, as did a minority of Canadian lumber manufacturers. Canadian lumber producers believe that series of North American Free Trade Agreement (NAFTA) rulings had given Canada a stronger negotiating position, but Canadian officials failed to take advantage of it.


 






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