The granddaddy of all trade disputes is getting ready to rear it’s ugly head again.
The current softwood lumber agreement is set to expire in October. It has been in place since 2006 and was the result of a nasty 5 year legal battle between neighbours that killed thousands of forestry jobs across the country.
The Minister of International Trade’s Office told My PG Now in a statement that they support a renewal of the current agreement with the same key terms. But the President of the BC Lumber Trade Council James Gordon says that so far, renewal talks between the two parties are not happening
“They are very much focused on their own trade priorities which is really the Trans-Pacific Partnership. So a discussion in earnest around softwood lumber really hasn’t begun, and the Canadian Government has been unable to get full US engagement on the file.”
Despite the lack of talks, Gordon is hopeful the deal will be re-signed. He says both sides of the border has benefited from the current agreement. He pointed out one of the biggest American concerns during last decade’s negotiations; market share. Canada’s softwood lumber market share in the USA has dropped from 34% in 2006 to 28.8% last year.
“They were also looking for some market protection when prices were low.” Gordon said “The last three months are a good example where we’ve been paying tariffs on Canadian lumber going into the United States because prices are low.”
He added that the agreement has had a big impact on the way BC Forest companies ship lumber citing a 16 fold jump in the amount of lumber shipped to China since 2005.
Gordon commended Ottawa for conducting extensive consultations with the Canadian Forest industry saying industry and government are “very much aligned”.
If the agreement does lapse on October 12th 2015, the USA has agreed to hold off on trade sanctions for at least a year.