MONTREAL—The softwood lumber dispute reignited late late week after the U.S. Lumber Coalition said it formally petitioned the American government to impose duties against Canadian softwood lumber producers.
The lobby group said it asked the U.S. Department of Commerce and the U.S. International Trade Commission to restore the conditions of “fair trade” for softwood lumber.
The coalition alleges that provincial governments, which own most of Canada’s vast timberlands, provide trees to Canadian producers at rates far below market value, along with other subsidies. As a result, the group says Canadian lumber is being sold for less than fair value in the United States.
“The coalition’s legal action seeks for the United States to impose duties to offset the harm caused to U.S. mills, workers and communities by Canadian softwood lumber production subsidies and Canadian producers dumping the subsidized merchandise on the U.S. market,” the U.S. Lumber Coalition said in a statement.
Softwood producers in Canada dispute the U.S. Lumber Coalition’s assertions. Montreal-based Resolute Forest Products said producers in Quebec and Ontario pay market prices and should have access to free trade with the United States.
“As a matter of principle we believe very strongly—it’s not only the Resolute position but the Quebec position—that we deserve nothing less than free and unencumbered access to the U.S. market,” spokesman Seth Kursman said.
The B.C. Lumber Trade Council said the claims levelled by the U.S. lumber lobby are based on unsubstantiated arguments.
“Similar claims were made in the prior round of trade litigation and were ultimately rejected by independent NAFTA panels, which concluded that Canadian lumber was not subsidized and did not cause injury to the U.S. industry,” said council president Susan Yurkovich in a statement.
Provincial premiers urged Canada and the U.S. to move quickly to reach a new agreement, saying the imposition of duties would hurt Canadian forestry communities and drive up new home prices in the U.S.
“These protectionist measures would negatively impact the economies in both countries,” the Council of the Federation said in a news release.
The Canadian government anticipated Friday’s filing. Alex Lawrence, a spokesman for International Trade Minister Chrystia Freeland, said Canada is prepared for any situation, and the government will “vigorously defend” the interests of Canadian workers and producers.
Still, he said the protectionist climate in the U.S. complicates any trade negotiation, including this one.
Canadian exports account for about a third of the American softwood lumber market. The Canadian lumber industry has said it would oppose quotas on softwood lumber that can be shipped into the U.S.
Kursman urged the Canadian government to hold steady and use incoming president Donald Trump’s support of the Keystone XL pipeline and Canadian exports of electricity as an incentive to strike a lumber deal.
“Canada should use all of its natural resources as leverage in any negotiations with the United States,” he said.
Softwood lumber is excluded from NAFTA and lumber producers in both countries continually bicker over whether the access by Canadian companies to public forests constitutes an illegal subsidy.
The 2006 softwood lumber agreement expired a year ago but a one-year standstill period kicked in to allow an attempt at resolution.
The agreement required Canadian softwood producers to pay export taxes if the price of lumber went below a certain amount. If the price of lumber was above that threshold, Canadian producers were not subject to export taxes or restrictions on how much softwood they could ship to the U.S.