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Strategies & Market Trends : Winter in the Great White North -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (5322)	12/7/2003 11:57:52 PM
From: Lazarus_Long	Read Replies (2) \| Respond to of 8273

U.S.-Canada agreement seen on lumber Accord would set out framework for complete removal of import duties. December 6, 2003: 11:20 PM EST VANCOUVER, British Columbia (Reuters) - U.S. and Canadian negotiators have reached a possible agreement to end their trade dispute over softwood lumber, Canadian industry representatives said Saturday. The pact, which must be approved by the Canadian industry, would allow Canada's softwood producers access to 31.5 percent of the U.S. market without paying duties, and sets out a framework for duties to be dropped completely. Ottawa is scheduled to present the tentative agreement to Canadian lumber producers next week. Several of the larger firms have already endorsed the pact. "Today's development is an important milestone. This is the right action at the right time," Abitibi-Consolidated Inc chief executive John Weaver said. Canadian producers said the U.S. lumber industry group that filed the initial trade complaint had endorsed the pact. Representatives of the U.S. sawmills were not available for comment Saturday. Under the proposed agreement, the United States would drop the trade penalties it imposed last year to counter what Washington and U.S. sawmills alleged were unfair subsidies to Canadian producers. Canada, which has denied the subsidy allegation, would drop the complaints it filed against the trade sanctions to the World Trade Organization and under the North American Free Trade Agreement. The countries would also divide up the estimated $1.4 billion in duties already paid by Canadian companies, with 52 percent of the money being returned to Canada and the United States keeping 48 percent. Canada exports about $6 billion in softwood lumber, such as spruce, pine and fir, to the United States each year for use in housing construction. Canada and the United have battled over lumber trade for decades, but the latest spat came to a head in 2001 with the expiration of a five-year trade accord that had also set quotas on the amount of lumber Canada could ship duty free. Slocan Forest Products Ltd chief executive Jim Shepherd said a key difference in the new accord was that it set out rules provinces can follow to eliminate or reduce quota restrictions in three years. Most of Canada's lumber is cut in public forests and Washington has demanded to the provinces that own them make the log pricing systems more market-oriented so they cannot be used to subsidize private sawmills. "As we work through these policy reforms... we will then have eventually open access to the U.S. market," Shepherd said. YOUR E-MAIL ALERTS Follow the news that matters to you. Create your own alert to be notified on topics you're interested in. Or, visit Popular Alerts for suggestions. Manage alerts \| What is this? The share of the U.S. market allowed Canadian producers under the pact is the equivalent of about 17 billion board-feet, about 2.3 billion more than was allowed under the old accord, according to a Canadian industry representative. Shipments that exceed the quota would be subject to a fee of $200 per 1,000 board feet. Canada has supplied about 33 percent of the U.S. market in recent years. The proposed agreement also differs from the old accord by including shipments from Canada's Maritime Provinces. Ottawa will decide how the quotas are divided between provinces and lumber firms. Top of page money.cnn.com