USTR - Remarks by U.S. Trade Representative Susan C. Schwab at the Signing of U.S.-Canada Agreement on Softwood Lumber Trade
Office of the United States Trade Representative


Remarks by U.S. Trade Representative Susan C. Schwab at the Signing of U.S.-Canada Agreement on Softwood Lumber Trade

Thank you Minister.

This is a great day – a day that is a long time in the making – and which many people understandably thought would never come.

With this signing and implementation of this landmark agreement, we hope to bring to a close over 20 years of litigation – and the market instability and political tension that have often accompanied it.

To reach this agreement, both sides had to compromise and make hard choices - and there is still much work to be done to bring the agreement into force. But once it is operational, this will be a good agreement for the United States, for Canada, and for the relationship between our two countries.

Canada is the United States’ largest trading partner, and it is vital that we keep that relationship strong and growing. Even while this dispute was ongoing, over 96% of our trade with Canada was dispute-free. After this agreement is implemented, over 99% of our trade will be dispute free.

For those who would criticize this agreement, I ask them to consider the alternatives. Without this agreement, we would see a continuation of litigation – either through continuation of the existing anti-dumping and countervailing duty orders or through the filing of another round of cases. The duties collected as a result of those cases could be substantially higher than those applied under the settlement and would be susceptible to great volatility. Since 2002, the combined duty margins on softwood lumber have ranged from 11% to 27%. If this agreement had been in place over the last ten years, there would have been unrestricted trade for over half the time.

In place of costly litigation, we will create a predictable and stable market; strengthen the competitiveness of the North American lumber industry; provide a pathway to resolve the policy questions underlying this dispute; bring a little more harmony among neighbors; and provide financial assistance to worthy causes.

With this agreement, we will have a formal channel – outside the super-heated environment of litigation – to discuss ways to resolve our differences once and for all. Under the terms of the agreement, we will establish a bi-national working group to discuss policies that could eventually result in the elimination of border measures. The commission is expected to produce a report within 18 months after the agreement is signed. We have never had that before under any previous lumber agreement.

With this agreement, almost half a billion dollars will be used to advance low income housing initiatives and disaster relief, to provide community assistance to timber-reliant communities, and to assist in the development of forest management practices that will promote sustainable forestry. Another $50 million will be disbursed to a bi-national industry council, which will work to build an atmosphere of trust and cooperation, while promoting the integration and strengthening of the industry.

The United States Government is fully committed to this endeavor. We fully expect that this agreement will have a duration of at least seven to nine years. In fact, it is our sincere hope that the processes that will be established under the agreement will lead to a permanent solution to a problem that has too long been a distraction in our relationship. We have an historic opportunity and we need to grab it.

I want to thank the leaders of our two great countries – President Bush and Prime Minister Harper – for their leadership and their unwavering commitment to finding a solution to this longstanding irritant.

I also want to thank my Canadian colleagues and counterparts, Ambassador Michael Wilson and Minister David Emerson, for their tremendous efforts in concluding this agreement. Their steadfast support has been, and will continue to be, absolutely critical to the success of this undertaking.

Finally, I want to thank the U.S. negotiating team from USTR and the Department of Commerce, which has put in long hours over many months to negotiate this agreement.

We can all be proud of this tremendous achievement. Let us stay committed to its success.

Thank you.

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item: 09/11/2006 | U.S. Trade Representative Susan C. Schwab Announces Signing of U.S.-Canada Softwood Lumber Agreement
item: 09/12/2006 | Schwab Announces Plans for Disposition of Funds for Meritorious Initiatives under the United States-Canada Softwood Lumber Agreement