- The Washington Times - Tuesday, July 29, 2003

ASSOCIATED PRESS

Canadian and U.S. officials yesterday said they have reached a tentative deal to settle a long-running dispute over imports of Canadian softwood lumber used to build homes in the United States.

“There is a proposal that both governments have agreed to take back to their industries,” said Heather Layman, a spokeswoman for the U.S. Commerce Department. She declined to give details.

Grant Aldonas, an undersecretary of Commerce Department who has led the U.S. side in the confrontation, is expected to meet in Washington this week with Douglas Waddell, a Canadian assistant deputy minister of trade, to complete more details.

Negotiators reached the agreement late last week after talks in Washington, officials from both countries said. The two sides are reporting back to ministers and lumber industry leaders in the two countries before a final decision is made.

“It isn’t the time, it’s the quality of the agreement that matters. It is important to take the time to analyze what we have as a draft,” Canadian Trade Ministry spokesman Sebastien Theberge said.

Speaking at a World Trade Organization meeting in Montreal, Mr. Theberge said the deal could end litigation between the countries brought through the WTO and the North American Free Trade Agreement.

Last year, the United States imposed tariffs averaging 27 percent on softwood imports from four Canadian provinces. The Bush administration contended that government subsidies keep Canadian lumber prices artificially low and threaten the U.S. industry.

Softwood lumber from pine, spruce and other trees is used to frame houses. The United States imported nearly $6 billion of softwood lumber last year, about one-third of the American market.

Canada denies that it subsidizes its lumber industry. It complained to the WTO that U.S. tariffs have cost Canadian lumber companies hundreds of millions of dollars and eliminated thousands of jobs.

A U.S. official, speaking on the condition of anonymity, said the draft agreement would reintroduce a quota system for Canadian lumber entering the United States, similar to an agreement reached during the 1990s.

Commerce’s Mr. Aldonas proposed this year that Canada open bidding on cutting rights for timber and eliminate restrictions on how lumber is cut and processed. Canada has rejected similar proposals in the past.

Mr. Theberge said recent and pending trade panel discussions moved the lumber talks forward.

Brian Zak, president of the Vancouver-based Coast Forest and Lumber Association, called the agreement “a great first step” toward fair trade, but said more work was needed.

The tentative deal may force mills in interior British Columbia, which currently employ three shifts of workers to produce framing materials, to cut back production, Mr. Zak said.

But over time, the agreement should allow Canadian lumber production to return to historical levels, he said.


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