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Industry Mixed Over Softwood Deal Prospects
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Industry mixed over softwood deal prospects
by GORDON HOEKSTRA Prince George Citizen staff
A Prince George businessman, who is expanding his lumber remanufacturing operations, is confident a negotiated deal will end the softwood lumber trade dispute with the U.S. in the next two months.
That's because a recent North American Free Trade Agreement dispute panel ruling will force the two sides to the table to work out a deal, said John Brink, owner of Brink Forest Products.
Both sides claimed victory in the NAFTA panel ruling this month on the 18.79-per-cent countervailing duty portion of the U.S. tariffs, which Canadian companies have been paying for 14 months.
The American industry said it confirmed that Canada subsidizes its industry, while Canada said the fact the panel determined the Americans used a flawed method to calculate the subsidy was critical. The U.S. Commerce Department has 60 days to respond, and Canada expects the duty to go down.
"The Americans will now be motivated to make a negotiated agreement," said Brink.
Others are not as optimistic.
Earlier this week, one industry observer said he saw little hope of a long-term settlement that would bring free trade.
It's clear that the U.S. lumber coalition which launched the trade dispute is interested in restricting Canada's market share, said Madison's Canadian Lumber Reporter publisher Laurie Cater. "I don't think the Americans want free trade," he said.
He also noted that the NAFTA ruling is being viewed as significant in the U.S. because the panel said provincial timber pricing systems can confer a subsidy. "It's just a question of what degree," noted Cater.
The U.S. Coalition for Fair Lumber Imports has already submitted to the U.S. Commerce Department 12 additional types of subsidies they say are provided to Canadian softwood lumber producers.
The new subsidies should add another 4.85 per cent to the combined 27.2-per-cent countervailing and anti-dumping duties, says the coalition.
The additional subsidy allegations, submitted last week, total $642 million and include money from federal government worker assistance programs and allowances by the B.C. Ministry of Forests for harvesting mountain pine beetle infested timber in northern and central B.C.
"Our submission shows that the Canadian governments have opened the subsidy spigot even wider to offset the countervailing duties and anti-dumping duties," said Rusty Wood, chairman for the coalition and a Georgia sawmill owner. "As required by law, the Commerce Department should vigorously investigate and offset the new subsidies."
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