April 06, 2020

Softwood deal delay angers U.S. lumber producers

VANCOUVER – A delay in implementing the Canada-U.S. Softwood Lumber Agreement is angering American lumber producers.

The Washington-based Coalition for Fair Lumber Imports said Monday that Canadian exporters are taking advantage of the delay to flood the U.S. market with lumber before export taxes kick in under the agreement.

The strategy is accelerating and deepening a downturn in a U.S. lumber market already weakened by a drop in demand as housing starts decline, the coalition said in a news release.

“The United States satisfied all of its obligations to facilitate implementation of the settlement agreement by October 1,” coalition president Steve Swanson said.

“Some Canadian parties, however, are doing everything possible to delay implementation. As a result, there is havoc in the U.S. lumber market and rapidly escalating job losses.”

Swanson urged Canada to fulfill its commitment to implement the deal by Oct. 1, “even if it must do so retroactively.”

The federal government announced late Friday that the planned Oct. 1 implementation would be delayed until Nov. 1 to give more time to work out technical problems, especially related to the withdrawal of dozens of legal cases connected with U.S. lumber duties.

The American duties totaling 10.8 percent are supposed to be replaced by a Canadian export tax of about 15 percent, based on current lumber prices.

A spokesman for the U.S. Trade Representative’s office would not comment on the coalition’s complaints except to say it wants the agreement to come into force as soon as possible.

The coalition’s outburst does not signal that the agreement negotiated last summer is in jeopardy, said Bob Klager, communications director for International Trade Minister David Emerson.

The U.S. government agreed to extend the deadline while Ottawa works with Canadian exporters to implement the agreement as quickly and efficiently as possible, he said.

“Certainly we’re discussing with the United States the challenges of implementation confronting the industry on both sides of the border,” Klager said from Ottawa.

Klager pointed out Swanson was incorrect in saying the U.S. side had fulfilled its obligations. For one thing, the Americans have not yet obtained a ruling from the U.S. Court of International Trade in one of the many lumber cases that allows it to refund the duties to Canada.

Canadian industry sources also say it’s not clear whether enough U.S. producers have signed letters withdrawing their claims of injury from Canadian lumber imports to satisfy one of Canada’s demands in the agreement.

Klager challenged the coalition’s claim that Canadian exporters are flooding the U.S. market in advance of the deal’s implementation.

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