Softwood Lumber Negotiations Lack of Update

Canada and the United States remain “far apart” on several important points concerning a new agreement on softwood lumber, according to the Canadian government’s chief negotiator, said CBC Thursday.

Testifying before the House of Commons committee on international trade on Thursday, Martin Moen, an official with the department of Global Affairs, said there have been a dozen face-to-face meetings and numerous teleconferences between Canadian and American officials.

But, he added, the two sides have yet to agree on the structure and details of market share, appropriate exclusions, the treatment of high-value products, anti-circumvention provisions and joint market development.

Liberal and Conservative MPs jousted Thursday over the need for another irregular mid-summer meeting of the House Trade Committee, this time on softwood lumber negotiations, according to The Hill Times also Thursday.

Canada-US Softwood Lumber Lack of Agreement

Failure to reach a deal by October 15, 2016 — the one-year anniversary of the expiry of the old, nine-year pact — would allow US producers to petition Washington to impose new duties. Moen said without an agreement in place, Canadian officials are unsure what US industry would actually do — and when.

“We have had 12 face-to-face meetings with the US government and numerous teleconferences. Although the discussions have been constructive and have led to a better understanding of each party’s positions and concerns, Canada and the US … I have to be honest, we do remain far apart on several key issues,” Moen told a special meeting of the all-party, international trade committee, according to CBC Thursday.

Little Hope of Reaching Agreement Before October

Those gaps, Moen said, include the appropriate structure of the agreement:

  • how to combine export charges and export quotas that result in keeping Canadian exports below an agreed-upon share of the US market;
  • regional exclusions for the Atlantic provinces and the territories;
  • provisions for company exclusions, for mills that source inputs from the U.S. or private lands;
  • the treatment of high-value products, and;
  • the treatment of remanufacturers.

Canadian Forest Industry Input

“Canadian stakeholders continue to tell us very clearly that no deal is better than a bad deal, so we need to be prepared for the possibility that a new agreement may not be concluded and that Canada will be forced back — potentially, this is a risk — into a trade remedy investigation,” Moen said.

“We’re continuing to be intensely engaged in trying to see if a new deal is possible. However, we are preparing for all eventualities, and are prepared to vigorously protect and defend the interests of softwood lumber producers if there is a return to trade action, to litigation.”

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Parliamentary House Trade Committee Discussions

The Conservatives proposed a motion to the committee Thursday that sought to call on International Trade Minister Chrystia Freeland to establish a roundtable consisting of herself, provincial government officials, industry stake- holders to develop a national position on a new deal.

After opposition members asked for it, the committee unanimously agreed to sit Thursday morning to be briefed by and question the top public servants on the softwood file, as an October deadline for possible trade penalties by the United States on Canadian lumber exporters creeps closer, The Hill Times said.

There are considerable gaps that will need to be bridged in order for a new agreement to be concluded. Negotiations are continuing with the goal of reaching an agreement by the end of the standstill period.

Martin Moen Canada’s chief negotiator in the softwood-lumber talks with the United States

Conservative and Liberal Committee Member Comments

Tory MP Randy Hoback argued in favour of the motion, saying there’s confusion in the industry.

But the Liberal-dominated committee voted down the motion, with Liberal MP Kyle Peterson saying it would duplicate the ongoing process and slow things down.

“It’s just politics that they asked us today to be here,” Liberal MP Linda Lapointe said of the call from the opposition Conservative and NDP MPs for the unusual summer committee meeting. Most House committees stopped meeting regularly when the House rose for the summer in June.

The next talks between Canadian and US officials are scheduled for August 24.