Washington Weighing Exemptions On Canadian Softwood

"Obviously, that's an idea that's being considered," he said in an interview Thursday. "If this would help bring a resolution, I want to help bring a solution" to the long-running battle that threatens a $10-billion annual industry. Mr. Wilkins said he's been working hard to keep top White House officials informed of Canada's position. For three years, duties averaging more than 20 per cent on Canadian softwood exports have been collected by Washington, totalling more than $5 billion -- money the industry wants back. The two countries have been battling at various trade tribunals over the penalties on Canadian softwood, which is used mainly in home construction. Negotiations were going on at the same time, but broke down in early August after Washington shrugged off a major Canadian win under the North American Free Trade Agreement. "I understand Canada's frustration on this," said Mr. Wilkins, who has been Washington's envoy to Ottawa for just a few months. "Canada has a valid argument. So, too, does the United States," added the ambassador, who insists the only solution is a negotiated deal, rather than continued legal fights. Some in the Canadian industry, however, say the U.S. only wants to reach a treaty because it hasn't won many fights under international trade law. Washington, however, did claim a win in late August from the World Trade Organization. Even though softwood trade accounts for only about a three per cent of total cross-border commerce, the implications are far weightier because the bitter dispute could poison relations between the two neighbours, warned Mr. Wilkins. "It has the potential of being adverse on the relationship as a whole. I hope it hasn't come to that yet -- I don't believe it has," he said. Mr. Wilkins suggested he's trying hard to broker new talks toward another softwood treaty, to replace the last five-year deal that expired in 2001, triggering the latest trade dispute. "(I'm doing) all I can to pass on to Washington the importance of this issue in Canada and to urge that we -- and I've been doing that -- get back to the negotiating table," said Mr. Wilkins. The ambassador said he returned to Washington last week to brief U.S. Trade Representative Rob Portman and various Department of Commerce officials on Canada's position. "I'm reporting back to Washington what I hear, what I know from Canada. If I can play a role in bringing parties together, I want to." Earlier this week, the U.S. administration said it's considering reducing high tariffs on construction materials, including softwood lumber from Canada and cement from Mexico, in the wake of hurricane Katrina. Treasury Department officials have said the administration in Washington has the executive authority to reduce the tariffs to meet special needs. http://canadaeast.com/apps/pbcs.dll/article?AID=/20050916/TPMONEY08/109160042/-1/MONEY

Note: http://canadaeast.com/a...