Canada Seeks Truce In Softwood Lumber Feud

British Columbia is ready to discuss concessions over softwood lumber exports with the United States to ease growing American pressure to impose a countervailing duty.

Provincial and industry representatives said Thursday they will present their proposals to the U.S. Trade Representative and Department of Commerce officials Monday in Chicago.

Forests Minister Andrew Petter said the discussions are “a preferred alternative to a fourth countervailing duty case.”

The U.S. lumber industry has complained Canadian softwood lumber is subsidized by low timber-cutting fees on public land, and is flooding the U.S. market, affecting prices and disrupting the industry.

The U.S. industry has lost all its previous trade cases against Canadian exports but argued it did not get a fair shake from the dispute-settlement mechanism set up under the North American Free Trade Agreement.

Jake Kerr, co-chairman of the Canadian Forest Industries Council, said the talks are not negotiations but are “a question of seeing what the size of the playing field is and what peoples’ expectations really are.”

“If they are within reasonable limits on both sides then I would suggest we will get more serious about it,” he said.

Kerr would not identify what proposals the British Columbia delegation is prepared to make.

The range of options is broader than restrictions on the amount of softwood lumber exported to the United States, or an export tax like the one Canada voluntarily imposed in the 1980s to forestall a U.S. tariff.

The U.S. government has indicated it is under growing pressure from the American industry to wring concessions from Canada.

In the absence of any progress toward settling the issue, the U.S. industry could then initiate a countervailing duty action through the U.S. Commerce Department.