Vive Le Canada

Deal ended long-standing lumber war
Date: Wednesday, January 03 2007

Deal ended long-standing lumber war
Negotiations dominated economy's forest picture for five years

Gordon Hamilton
Vancouver Sun

Tuesday, January 02, 2007

Clayton Storey, Sawmill Supervisor at Tolko Industries in Kelowna, with stacks of lumber bound for the U.S. market last spring.

After five years of acrimony with the United States, the Canadian forest industry finally abandoned its battle for free trade in lumber in 2006.

It accepted a deal that guarantees access to the world's largest building products market in exchange for a tax on Canadian wood and the return of only $4.3 billion US of $5.3 billion in duties.

The free trade agreement, which quietly received royal assent Dec. 14, was by far the largest event in the forestry sector last year. For five years it had dominated the economic and political landscape, spawning an industry of its own peopled by trade lawyers. Their fees alone have drained $100 million from federal and provincial coffers and at least as much again from their forest industry clients.

On top of the costs, there was a huge pot of money, $5.3 billion US in duties, being held by the United States. In the spring of 2006, a growing number of politicians and corporate leaders were beginning to accept the fact that a tax on Canadian products -- even though the North American Free Trade Agreement and America's own courts find there is no cause for it -- was a way to heal the festering trade wound and repatriate most of that $5.3 billion.

In the U.S., battle fatigue was also evident.

"[Word] trickled down even to my level that [U.S. President George W. Bush] was quite keen . . . to resolve the dispute in a way that was equitable to both sides and to move on," U.S. State Department official Elizabeth Whitaker told The Vancouver Sun in October.

So on a Friday afternoon in March, when B.C. Forests Minister Rich Coleman was driving along the Coquihalla Highway, and his phone beeped, displaying the number of Michael Wilson, Canada's freshly appointed ambassador to the U.S., he suspected a breakthrough had been achieved.

"They are serious about talking," Wilson said of the Bush administration.

[Proofreader's note: this article was edited for spelling and typos on January 4, 2007]

This article comes from Vive Le Canada

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