U.S., Canada keep lumber talks open

Associated Press

WASHINGTON — A dispute over softwood lumber is hurting U.S-Canadian relations, Canadian Trade Minister Pierre Pettigrew told U.S. officials Monday.

Pettigrew met with Commerce Secretary Don Evans, U.S. Trade Representative Robert Zoellick and members of Congress and told them the fight over lumber could have broader implications for the countries, each of which is the other’s largest trading partner.

"Canada has always tried not to isolate the United States on this issue. It is making it impossible for me not to join other countries the way we are being hammered by the United States with its trade laws right now," Pettigrew said.

He blamed "the dark forces of protectionism" for the Bush administration’s decision last month to impose a preliminary tariff of 19.3 percent on Canadian softwood lumber. A final decision on the tariff is expected in October.

Trevor Francis, spokesman for Commerce Department, said the meeting between Evans and Pettigrew was productive.

"They spoke optimistically about the possibility of finding an alternative solution to this ongoing dispute," Francis said. "The secretary stands by laws that mean an equal and level playing field for American businesses."

Canada filed an expedited complaint urging the World Trade Organization to reject the tariff, but it was denied. Canadian Prime Minister Jean Chretien has also linked the lumber issue to greater U.S. access to Canadian oil and natural gas.

Although Pettigrew said a phone call last month between President Bush and Chretien has improved the dialogue, the issue remains a headache for both countries.

The dispute involves the amount of "stumpage" fees Canadian provinces charge companies for logging on government land. The U.S. lumber industry has charged that the fees are set at such low levels that Canadian competitors have an unfair advantage.

Imposing the tariff, which targets wood normally used in homebuilding, was praised by the U.S. timber industry and lawmakers from lumber-producing states as a way to protect U.S. jobs threatened by Canada’s system. Opponents said it would hurt American consumers by adding up to $1,000 to construction costs of a new home.

The Coalition for Fair Lumber Imports, made up of U.S. lumber producers, says Canada — not the United States — is guilty of protectionism. Coalition attorney John Ragosta said Canada only wants to open the border to lumber, but leave other limits in place that give Canadian producers an edge.