Canadian,
U.S. representatives aim to reopen talks
By SIMON TUCK
With files from Reuters and Bloomberg
Thursday, June 26, 2003 - Page B11
OTTAWA -- Top trade officials from Canada and the United
States will meet Monday in Washington as the two countries
try to break the logjam over softwood lumber.
Officials from both sides said yesterday that the "exploratory"
one-day meeting could lead to a resumption of negotiations
over the two-year-old dispute.
Sébastien Théberge, a spokesman for Canadian
Trade Minister Pierre Pettigrew, said the meeting could lead
to full negotiations.
"It's a meeting to explore and exchange on the next
steps before we resume negotiations in a more formal way."
The scheduled meeting was prompted by the latest U.S. counterproposal
that called for an export tax of at least 15 per cent on softwood
lumber exports from Canada.
Industry sources said last week that the U.S. proposal calls
for an export tax that would escalate once Canadian lumber
grabs the equivalent of 29 per cent of the $10-billion-a-year
(U.S.) market.
The U.S. lumber industry, meanwhile, has asked Washington
to raise the tariffs on up to $7-billion a year in Canadian
timber imports.
The U.S. team will be led on Monday by Grant Aldonas, undersecretary
of commerce for international trade. Canada will be led by
Doug Waddell, Ottawa's senior official in the softwood negotiations.
As a prelude to the meeting, Canadian officials met yesterday
in Ottawa with industry representatives following discussions
a few days earlier with the provinces.
The B.C. Lumber Trade Council, one of the key industry bodies,
wouldn't comment on the talks.
The United States, believing the provinces unfairly subsidize
their softwood lumber producers, has imposed duties averaging
more than 27 per cent on Canadian softwood.
Canada denies that charge. A North American free-trade agreement
dispute panel is scheduled to rule July 3 on the legality
of U.S. antidumping duties, which average 8.43 per cent on
Canada's softwood lumber.
A separate NAFTA panel decision on the legality of 18.79-per-cent
countervailing duties could come later this summer.
Canada ships about $6-billion worth of spruce, pine and fir
to the United States each year.
It is not yet clear whether a downturn in Canada's lumber
industry, which has resulted in layoffs, would add urgency
for a U.S.-Canada lumber trade deal. That downturn is due
in part to a domestic oversupply of lumber and a rising Canadian
dollar.
Recently, the United States proposed substituting a quota
aimed at keeping Canadian market share in the United States
below 30 per cent.
But one source close to the industry side in the Ottawa meetings,
who asked not to be identified, said there were serious industry
concerns with the plan, such as the provision that all wood
coming across the border would be taxed, including below-quota
shipments.
The U.S. industry has apparently accepted the Canadian idea
of a volume-based deal, similar to one that was in effect
between 1996 and 2001. The U.S. counteroffer applies roughly
the same structure as a Canadian proposal -- imposing a so-called
tariff-rate quota that varies depending on the volume of shipments
to the U.S. market.
Ottawa had proposed collecting an export tax of $25 (Canadian)
per 1,000 board feet on shipments between 17 billion board
feet and 18 billion board feet; with the tax rising to $50
between 18 billion and 19 billion board feet, and climbing
further to $100 after 19 billion board feet.
A government source believes the United States would like
to settle the dispute within weeks, which Ottawa attributes
to its belief that Washington is concerned about losing an
upcoming binding NAFTA ruling on the softwood battle.
John Ragosta, a lawyer and lobbyist for the Washington-based
Coalition for Fair Lumber Imports, called that "ridiculous."
Mr. Ragosta also said that the success of the upcoming bilateral
talks will depend on Ottawa's willingness to allow market
forces to dictate prices.
"Some of the proposals have just not been realistic,"
he said. "It's up to Canada." |
