Tensions grow over softwood lumber agreement

The standstill period where the U.S. is precluded from launching trade action against Canadian lumber producers ends next week.

The standstill period where the U.S. is precluded from launching trade action against Canadian lumber producers ends next week, on Oct. 12, 2016.

According the Globe and Mail, Canada’s international trade minister Chrystia Freeland recently warned it may not be possible for Canadian and American officials to resolve the softwood-lumber battle before the Oct. 12 deadline.

In an interview with Chris Hall on CBC Radio’s The House, Freeland said anti-trade sentiment in the U.S., whipped up by Donald Trump and others, has made getting a deal on softwood lumber “fiendishly” complicated.

The U.S. Lumber Coalition says Canada’s “unfair lumber subsidies” have for decades harmed the U.S. lumber industry, threatening its workers with mounting unemployment, and denying many tree farmers a market for their timber crops.

In a recent letter to U.S. trade representative Michael Froman, a group of 25 U.S. senators also wrote that the latest softwood lumber agreement had “harmful effects” to the American forest industry. The letter says a new agreement will only be acceptable if it addresses the “adverse impacts of Canada’s subsidized lumber” and if it’s sustainable over the long term.

B.C. premier Christy Clark and other provincial and territorial leaders have called the allegations made by the U.S. senators “unfair and inaccurate.” The premiers cited decisions by the World Trade Organization and NAFTA in 2006 that found Canadian subsidies to be less than one per cent and ineligible for trade action.

Hampton Affiliates – company that owns Babine Forest Products and Decker Lake Forest Products – is officially neutral on this issue since the company has operations on both sides of the border. However, Steve Zika, Hampton Affiliates’ Chief Executive Officer, said any additional taxes or tariffs would have a negative effect on individual operations in B.C.

“Depending on market or economic conditions at the time, these additional costs could result in less operation hours or closures of some facilities,” he said earlier this year.