Washington Weighing Exemptions On Canadian Softwood

Posted on Saturday, September 17 at 12:59 by jensonj
"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

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  1. Sat Sep 17, 2005 11:53 pm
    I believe the key word is "reduced" duty. Even if the Americans haven't won the dispute, they still are calling the shots.

  2. Sun Sep 18, 2005 2:28 pm
    Actually, no matter how the immediate USA/Canadian lumber situation goes, longterm, the Canadian lumber industry is hosed. Why? Global oversupply is increasing.Europeans know that. Americans know that. The Chinese know that.

    Who do they want to buy from?

    The Russians. Expected to export 10 million m3 in 2005, and keep increasing 20% per annum.

    Sell Canadian lumber at any price while you can. Soon you'll have to face the facts the USA, and the rest of the world, has other suppliers.

  3. Tue Sep 20, 2005 12:40 am
    One of the biggest reasons there has been no settlement in the softwood lumber dispute is that the large primary mills in the West do not want one right now. They can ship unlimited volumes to the US, and faced with the pine beetle problem, unlimited shipments are far more important to them than getting their duties returned. Why in the world would they agree to a negotiated setlllement which will almost certainly put a cap or a quota on volume?
    They are in excellent financial health and can afford to pay 16.73% in countervail duty and a minimal amount in anti-dumping rangin from.91% for West Fraser to 1.83% for Canfor and 3.72% for Tolko . This is a small price to pay in order to enjoy unlimited access; plus they are almost certain to get much of the duties refunded eventually. As well, the US Dept. of Commerce, by fostering the Softwood Lumber Dispute , has unwittingly provided them with a perfect excuse to close less efficient mills and replace them with centralized super mills that employ fewer people and process huge amounts of fibre. The unions, the provincial governments and the public all accept the story-line that these efficiencies are necessary for survival rather than plain old bottom line driven greed ,without any concern for the cost in human capital. The Coalition for Fair Lumber Imports is a perfect scapegoat, and the big Canadian mills have turned a poor situation to their advantage with great skill.

  4. Tue Sep 20, 2005 12:41 am
    One of the biggest reasons there has been no settlement in the softwood lumber dispute is that the large primary mills in the West do not want one right now. They can ship unlimited volumes to the US, and faced with the pine beetle problem, unlimited shipments are far more important to them than getting their duties returned. Why in the world would they agree to a negotiated setlllement which will almost certainly put a cap or a quota on volume?
    They are in excellent financial health and can afford to pay 16.73% in countervail duty and a minimal amount in anti-dumping rangin from.91% for West Fraser to 1.83% for Canfor and 3.72% for Tolko . This is a small price to pay in order to enjoy unlimited access; plus they are almost certain to get much of the duties refunded eventually. As well, the US Dept. of Commerce, by fostering the Softwood Lumber Dispute , has unwittingly provided them with a perfect excuse to close less efficient mills and replace them with centralized super mills that employ fewer people and process huge amounts of fibre. The unions, the provincial governments and the public all accept the story-line that these efficiencies are necessary for survival rather than plain old bottom line driven greed ,without any concern for the cost in human capital. The Coalition for Fair Lumber Imports is a perfect scapegoat, and the big Canadian mills have turned a poor situation to their advantage with great skill.



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