Deadline looms for softwood lumber trade dispute between U.S. and Canada

Associated Press

OTTAWA — Prime Minister Jean Chretien says he expects a softwood lumber impasse with the United States by the end of next month, but others are skeptical.

The trade dispute between U.S. lumber interests and Canada’s provincially regulated harvesters has dragged on for the better part of a century. The U.S. Commerce Department has threatened to reimpose countervailing duties on March 21.

On Monday, Chretien was asked in Parliament to intervene with President Bush to avert disaster for Canada’s softwood industry.

"The president is very aware of the situation," Chretien responded. "I’ve talked to him very regularly and very forcefully, and I am confident there will be a solution to this problem before the date of the expiration according to the American law."

Canadian softwood exports to the United States exceed $6.2 billion a year, roughly half from British Columbia, where tens of thousands of workers have already lost their jobs.

Unless agreement is reached by March 21, the U.S. government has threatened to restore a 19.3 percent countervailing duty and maintain an average 12 percent anti-dumping duty on softwood lumber from Canada.

Last week, International Trade Minister Pierre Pettigrew and Len Edwards, the deputy trade minister negotiating with U.S. officials, said it would be difficult to get a deal by the deadline.

Pettigrew spokesman Sebastien Theberge noted Monday that Chretien didn’t mention a date or timetable for reaching a solution.

"We’re not aware of any (pending) solution," said Andre Lemay, a spokesman at the Department of Foreign Affairs.

"If (the prime minister) knows something, he’s probably spoken to President Bush, but Bush hasn’t come out so far," Lemay said. "To be very polite here, I can’t comment on the prime minister’s comments."

Lemay said negotiators agreed Monday to meet again this week in Washington, D.C., the second meeting in two weeks after almost two months with little action.

Paul Cellucci, the U.S. ambassador to Canada, said Monday in an interview with the National Post he doubts an agreement can be reached by the end of March.

"If we’re continuing to make progress and it’s not resolved by then, there may be a way of suspending (duties) so we can continue to make progress," Cellucci added. "We’re very interested in getting this resolved."

U.S. lumber producers say Canada’s provincial stumpage rates amount to export subsidies, which are banned under World Trade Organization rules.

Canada is appealing to the WTO, where it has won on the issue several times, but hopes to reach a lasting agreement with the United States to avoid future flare-ups.