USTR - US, Canada Reach Agreement on Lumber Dispute
Office of the United States Trade Representative

 

US, Canada Reach Agreement on Lumber Dispute
04/27/2006

Washington, DC – US Trade Representative Rob Portman today joined Canada’s International Trade Minister David L. Emerson and Industry Minister Maxime Bernier in announcing that the United States and Canada have agreed on the core terms of a softwood lumber accord. An agreement would end the more than two decade dispute that has overshadowed the trading relationship. The details of the agreement will be finalized over the next couple of months.

"This is a great day. Today’s agreement will resolve a long-standing dispute – ending litigation spanning more than two decades," said Ambassador Portman. "After multiple lawsuits without resolution, we are now close to achieving what many thought would never happen. There are still a few details to be finalized, but we’ve worked hard to shape a smart, market-based solution. This wasn’t easy – as others who have tried before can attest."

"I want to thank our two leaders – President Bush and Prime Minister Harper. It was their strong determination that armed these negotiations with the political will needed to deliver a good result," continued Portman. "I also want to recognize the heroic efforts and fresh thinking by our lead negotiators Deputy USTR Susan Schwab and Ambassador Michael Wilson. These two accomplished negotiators and their effective teams are to be congratulated for a job well done."

Under the terms of the agreement announced today, the United States and Canada will end all litigation over softwood lumber and provide for unrestricted trade in the favorable market conditions the industries have enjoyed for the last several years and which exist today. In a weak lumber market, Canadian exporters will pay export taxes that are adjusted as prices fall. Canadian provinces can also choose to pay lower export taxes by limiting exports below recent levels.

The agreement will also include provisions to address potential Canadian import surges, provide for effective dispute settlement, distribute the duties currently held by the United States, and discipline future subsidies and trade cases.

A portion of the duties will go to the U.S. companies, which will be ending their litigation, and an equal amount will be used to fund meritorious initiatives in the United States.


BACKGROUND

The United States and Canada have a largely dispute-free trade relationship. One of the irritants is a 20 year dispute over the trade of softwood lumber, which accounts for less than 3% of our bilateral trade. Both sides have made repeated attempts to negotiate a solution.

Under the terms of today’s agreement, all litigation will be terminated and the antidumping and countervailing duty orders revoked. Canada has agreed to put in place certain export measures which will be applied when the lumber market slumps. Under market conditions prevailing today, there would be no restriction on Canadian softwood lumber exports. Special measures will be put in place to deal with surges in exports from individual provinces.

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