U.S. launches new softwood move against Canada
The U.S. government isaccusingCanada ofnot living up to its end of last year's softwood lumber agreement and has launched a major challenge to the controversial deal.
U.S. Trade Representative Susan Schwabsaid Tuesday that Canada had violated several parts of the 2006 agreement, which was supposed to settle the decades-old dispute between the two countries.
"It is truly regrettable that, just10 months after the agreement entered into force, the United States has no choice but to initiate arbitration proceedings to compel Canada to live up to its [Softwood Lumber Agreement] obligations relating to export volume caps, proper application of the import surge mechanism, and anti-circumvention," she said in a statement.
Among the issues in dispute,U.S. officials arecomplaining that Canadian lumber companiesget unfair subsidies from the Ontario and Quebec governments.
They also say Canada has failed to lower export volume caps for the industry in British Columbia and Alberta to account for a shrinking U.S. market —something the U.S. says should have happened in January.
Canadian lumber industry groups were quick to reject the allegations that they hadn't followed the rules.
'We are in full compliance,' B.C. lumber industry says
"We categorically reject the claims against the British Columbia industry," said John Allan, president of the B.C. Lumber Trade Council.
"We have reviewed the negotiating history, our submissions on early drafts, and the final language of the agreement. From these reviews we have concluded that we are in full compliance."
Allan said he expects the Canadian government to defend his group's interests.
Canada's international trade minister, David Emerson, said the American request for arbitration was due to"differing interpretations" of the softwood lumber agreement.
"We will continue to work closely with the provinces and industry to defend Canada’s interests throughout the arbitration process," he said in a statement on the department's website.
The softwood lumber agreement provides for binding arbitration to settle disputes through theLondon Court of International Arbitration. This would be the first use of that process.
Last year'sagreement came after years of tough bargaining. The seven-year deal replaced U.S.-imposed lumber import dutieswith a system of Canadian export taxes and export quota limits.
The U.S. imposed more than $5 billion US of punitive duties on Canadian lumber exports before the agreement was finally signed, but agreed to refund only 80 per centof that to Canadian producers.
Critics of the deal complained at the time of what they calleda "sellout" to U.S. lumber interests. But the Harper government said it was the best that could be hoped for and the bulk of the Canadian lumber industry went along with it.