USTR - U.S. Trade Representative Susan C. Schwab Announces Entry into Force of U.S.-Canada Softwood Lumber Agreement
Office of the United States Trade Representative

 

U.S. Trade Representative Susan C. Schwab Announces Entry into Force of U.S.-Canada Softwood Lumber Agreement
10/12/2006


WASHINGTON – U.S. Trade Representative Susan C. Schwab today announced that the U.S.-Canada Softwood Lumber Agreement will enter into force tonight. As a result, both the United States and Canada will begin to implement their obligations under the agreement. For Canada, based on current market prices for softwood lumber, this will require the immediate collection of an export tax. With respect to the United States, this will result in revocation of the antidumping and countervailing duty orders on softwood lumber from Canada, an end to the collection of duty deposits on imports of Canadian softwood lumber, and the initiation of the process to refund duty deposits currently held by U.S. Customs and Border Protection.

"I am absolutely delighted that we have closed this long-running dispute that has for too long created friction with our largest trading partner," said Ambassador Schwab. "This agreement will move us beyond the uncertainties created by the intense litigation that has extended over two decades, benefit consumers by adding stability in the market, and create opportunities for the U.S. and Canadian industries to work together to resolve issues of concern. I am grateful for the leadership of President Bush and Prime Minister Harper, and the efforts of Canada’s Minister for International Trade David Emerson and Ambassador to the United States Michael Wilson, in accomplishing this historic agreement."

Ambassador Schwab also announced plans for the disbursement of funds to advance meritorious initiatives in the United States as outlined by the agreement. The three meritorious initiatives identified by the agreement include: (1) assistance for timber-reliant communities; (2) low-income housing and disaster relief and; (3) promotion of sustainable forest management practices. Of the $450 million provided for meritorious initiatives under the agreement, the United States Endowment for Forestry and Communities, Inc. was identified to receive $200 million, the American Forest Foundation was identified to receive $150 million, and Habitat for Humanity International was identified to receive $100 million. The $350 million allocated to the American Forest Foundation and United States Endowment for Forestry and Communities, Inc. will take the form of endowments. The $100 million allocated to Habitat for Humanity International will finance, for example, a revolving loan fund to purchase softwood lumber for homes for low-income families, especially those in timber-reliant communities and for families recovering from disasters.

"I am pleased that, in consultation with the Canadian government, we were able to fund worthy causes that will meet fundamental needs in the forestry sector to the benefit of both countries," said Ambassador Schwab. "The meritorious initiative funds promote a stronger North American lumber industry by connecting sustainable forest practices in the woods with the communities where wood products are made, and the use of lumber in building low-income housing and rebuilding after disasters."

Background

On September 12, 2006, USTR Susan Schwab and Canadian Minister for International Trade David Emerson signed the Softwood Lumber Agreement in Ottawa. Since that date, the United States and Canada have worked to amend and clarify certain aspects of the agreement’s text in order to be able to bring the agreement into force today.

Consistent with the terms of the Agreement, as amended, the United States and Canada will end a large portion of the litigation over trade in softwood lumber, and unrestricted trade will occur in favorable market conditions. When the lumber market is soft, as it is currently, Canadian exporting provinces can choose either to collect an export tax that ranges from 5 to 15 percent as prices fall or to collect lower export taxes and limit export volumes. The agreement also includes provisions to address potential Canadian import surges, provide for effective dispute settlement, distribute the antidumping and countervailing (anti-subsidy) duty deposits currently held by the United States, and discipline future trade cases. An industry-led bi-national working group will also be established under the agreement to discuss provincial policy reforms.

With respect to the disbursement of duty deposits currently being held in clearing accounts separate from the general treasury by U.S. Customs and Border Protection, approximately $4.3 billion will be returned to the importers of record; $500 million will be provided to the Coalition for Fair Lumber Imports, the petitioners in the antidumping and countervailing duty cases; $50 million will be provided to a bi-national industry council; and $450 million will be disbursed to promote meritorious initiatives in the United States. Inquiries regarding the three organizations identified to receive meritorious initiatives funds should be directed as follows:

  • United States Endowment for Forestry and Communities, Inc.:
    Dick Molpus, President
    (601) 948-8733

  • American Forest Foundation:
    Laurence Wiseman, President
    (202) 463-2460

  • Habitat for Humanity International:
    Larry Lincoln, Director of Public Relations
    (800) 422-4828 Ext. 2224

 
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item: 09/12/2006 | Softwood Lumber Agreement Between the United States and Canada
item: 10/12/2006 | Amendments to Softwood Lumber Agreement Between the United States and Canada