Canada, U.S. to meet on lumber
Will discuss trade dispute for first time since duty imposed
globeandmail.ca
Tuesday, August 28, 2001
By BARRIE MCKENNA
WASHINGTON -- Even as the U.S. legal assault on Canadian softwood lumber continues, Canada and the United States are tentatively exploring ways to end the $10-billion trade dispute.
Top Canadian and U.S. officials will gather in Washington on Thursday in their first face-to-face meeting since the United States hit Canadian lumber imports with a preliminary 19.3-per-cent duty on Aug. 10.
"We're looking for the root causes that could bring us to a long-term solution," explained Sébastien Théberge, an aide to Canadian Trade Minister Pierre Pettigrew. "Let's find out what gets them ticked."
But Ottawa, which recently appealed the U.S. duties to the World Trade Organization, insists it isn't negotiating with the Bush administration.
"This is not the first step toward negotiations," Mr. Théberge said.
Still, government and industry officials said many of the pivotal issues in the longstanding dispute will be up for discussion at the meeting -- most notably a massive reform of the way Canadian provinces sell timber cutting rights to lumber companies.
The U.S. lumber industry said it wants the two governments to look at what kind of reforms Canada must initiate to make the U.S. duties disappear.
"Let's talk about what would be necessary to create a market system in Canada," said John Ragosta, a lawyer and lobbyist with the Washington-based Coalition for Lumber Imports.
Mr. Ragosta said he expects officials to start looking at major "systemic reforms," including issues such as timber prices, harvesting restraints and long-term timber cutting agreements.
The United States has long complained that Canadian provinces unfairly subsidize their loggers by setting artificially low timber cutting fees under long-term agreements, known as tenures. It also alleges that the system encourages Canadian companies to cut trees even when prices and demand fall, causing them to dump lumber, or sell it below cost, in the U.S. market.
British Columbia, Canada's largest lumber exporting province, said recently it's ready to move to a "market-based" system. But B.C. Forests Minister Mike de Jong noted that such reforms would probably lower timber cutting fees, not raise them, as the Americans want.
Mr. Ragosta said it's time to find out which side is right.
"Let's test that out," he said of Mr. de Jong's assertion.
Ottawa is under intense industry pressure, particularly from outside British Columbia, not to negotiate with the Bush administration. Carl Grenier, executive vice-president of the Montreal-based Canadian Free Trade Lumber Council, said Ottawa should resist the urge to start any negotiations until it has exhausted all legal challenges to the U.S. duties at the WTO and elsewhere.
"That would invite a higher price for peace and allow the U.S. to set the terms," he noted.
Canadian officials said they also intend to use the meeting to explain the basis of Canada's WTO appeal to the Bush administration, review a U.S. decision to make its duties retroactive to April and set a working plan for future talks.
Mr. Pettigrew, who won't be in Washington this week, is also seeking an immediate meeting with his U.S. counterpart, Trade Representative Robert Zoellick, to talk about softwood lumber.
The two could meet as early as this weekend when Mr. Pettigrew and Mr. Zoellick are slated to be in Mexico City for a gathering of WTO trade ministers. |
