U.S. seeks to resolve softwood lumber trade dispute with Canada
The Bush administration hopes that talks with Canada’s newly elected government will help to resolve a decades-old trade dispute over Canadian softwood lumber.
Deputy U.S. Trade Representative Susan Schwab informed members of the Senate Commerce Committee’s Trade, Tourism and Economic Development Subcommittee in testimony Tuesday that the administration has approached David Emerson, Canada’s new Trade Minister, about starting negotiations as soon as possible to settle the dispute.
“The administration remains committed to a negotiated solution that will end this dispute, and we look forward to working with our Canadian counterparts in order to do so,” she said.
The current dispute was sparked after the 1996 Softwood Lumber Agreement expired in 2001, and the U.S. government responded by imposing antidumping and countervailing duties on softwood lumber imports from Canada. Subsequently, the Canadian government and lumber industry has filed about two-dozen cases challenging the duties under the North American Free Trade Agreement, World Trade Organization and U.S. Court of International Trade.
“Throughout the dispute, we repeatedly have stressed to our Canadian counterparts that, given the long history of this disagreement, there is little reason to believe that the current round of cases will resolve the matter once and for all, regardless of how the process plays out,” Schwab said. “Without a negotiated solution, chances are high that the dispute will continue.”
U.S. lumber industry representatives on both sides of the debate voiced desire to resolve the Canadian softwood lumber dispute through successful negotiations between the two countries.
“It is a tragedy that this long festering trade dispute has not been resolved,” testified Steve Swanson, chairman of Oregon-based sawmill operator The Swanson Group and a representative of the Coalition for Fair Lumber Imports. “This issue would disappear the day that Canada made reasonable, transparent and enforceable commitments to end their unfair trade practices and allow open and competitive markets for timber and logs. Canada simply refuses to do so because it is addicted to subsidies and has been unable to break the habit.”
The coalition noted that Douglas fir lumber costs $439 per thousand board feet in the United States compared to $113 per thousand board feet in Canada. “There is only one explanation — because the Canadian provincial government is setting prices at an artificially low level to subsidize lumber production and employment,” Swanson said.
The National Association of Home Builders said U.S. duties on Canadian softwood lumber imports adds about $1,000 to the cost of a home built in the United States.
“This duty acts as a tax on American home buyers and home owners seeking to make improvements to their homes, hurts housing affordability, and prevents many families from qualifying for a mortgage,” Barry Rutenberg, president of Gainesville, Fla.-based Barry Rutenberg Homes, told Senate lawmakers on behalf of the home builders group.
“The simple and critical fact is that the U.S. home building industry cannot meet the need for new homes and improvements to existing homes without lumber imports from Canada,” Rutenberg said.