STEVE MERTL

CANADIAN PRESS

 

VANCOUVER — The Canada-U.S. Softwood Lumber Agreement will come into force on Thursday after the two countries agreed to amendments that will sidestep diehard opposition within the Canadian lumber industry. The deal was supposed to be implemented on Oct. 1 but a substantial number of lumber exporters refused to withdraw legal actions against the United States over punitive softwood duties, a key U.S. requirement for it to revoke the duties. The Americans had demanded that more than 30 separate court actions be terminated by the deadline, forcing Ottawa last Friday to delay implementation until no later than Nov. 1.

 

Late Friday, International Trade Minister David Emerson said the two countries "have found a satisfactory resolution to the outstanding legal and administrative issues."

Emerson was unavailable for comment but his communications director, Bob Klager, said the two governments found a similar method for terminating the litigation.

"Under this new process only a limited number of cases will need to be terminated in order for the revocation of the duty orders," he said. "I think by virtue of the fact we've developed with them this simpler process, it satisfies the interests of both countries."

But an opponent of the deal said the "simpler process" involves unilaterally quashing the cases.

 

NDP trade critic Peter Julian said lawyers for the Canadian and U.S. governments filed a status report in the U.S. Court of International Trade on Friday that tramples on the legal rights of Canadian opponents of the lumber duties.

The brief says that on Friday the Canadian and U.S. governments tentatively agreed to amendments in the July 1 softwood deal that, if implemented, would affect one of the cases the New York-based court was hearing. "The litigation aspects of the agreement are currently under review by officials of the United States with the authority to approve the compromise of the claims in litigation," the document says. "On the day that the agreement enters into force, the governments of Canada and the United States will stipulate to a dismissal of all claims raised by the Government of Canada (in one softwood case) . . . and the United States Department of Commerce will revoke in their entirety the underlying anti-dumping and countervailing duty orders on softwood lumber from Canada." Julian claimed the report indicates the outstanding legal cases will be extinguished. "They're just legally using a legal sledgehammer and eliminating the claims," he said. "The intent of the filings today are to say to the courts that you do not need to proceed any further. As of Oct. 12 we are going to essentially extinguish the claims."

 

But Klager denied the suggestion, saying the compromise that only a few of the cases be withdrawn opens the door to lifting the duty orders, which in turn renders moot all other cases related to the duties.  Lumber industry leaders said Friday they knew nothing about the proposed changes.

"My concern always was that they were going to come out with some other big, blunt stick to pound us into the ground," said Vancouver sawmill owner David Gray, a spokesman for the Free Trade Lumber Council.

 

But Ottawa deserves credit if it has persuaded the U.S. government to accept something less than 100 per cent withdrawal of trade litigation, he said.

Julian, a suburban Vancouver MP, said the government would open itself up to lawsuits if it extinguished the companies' legal cases. He said the compromise reached Friday was a last-ditch effort to implement the agreement and avoid a ruling in yet another U.S. trade court case.

 

The court earlier struck down the U.S. lumber industry's claim Canadian imports posed a threat of injury and was set to rule on whether the roughly US$5.3 billion in duties collected since May 2002 should be returned.

 

The complex, seven-year deal replaces U.S. lumber duties with a Canadian export tax that kicks in when lumber prices fall below certain levels, a move aimed at protecting American producers who allege Canadian softwood is subsidized.

Canadian exporters are also getting back about 80 per cent of the lumber duties they've paid while the U.S. government and American producers split about $1 billion (U.S.) of the money.

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No. 117

 

 

The Honourable David L. Emerson, Minister of International Trade, today issued the following statement on the Softwood Lumber Agreement: “I am pleased today to announce that Canada and the United States are ready to implement the Softwood Lumber Agreement on October 12, 2006.  “Through flexibility, understanding and cooperation, both countries have successfully met all the requirements necessary to implement the Softwood Lumber Agreement next week, and have found a satisfactory resolution to the outstanding legal and administrative issues. “Our government made a commitment to ensure the swift return of more than C$5 billion to Canadian softwood producers, and I am pleased to confirm that the Export Development Canada duty refund mechanism is in place and moving forward. Providing at least seven to nine years of stability, this Agreement ends years of costly litigation and brings new economic certainty to those companies, communities and workers across Canada whose livelihoods depend on the softwood lumber industry.  “It is important as well to recognize this Agreement’s broader economic dimension. By establishing a new era of respect and cooperation with our most important trading partner, Canada’s New Government has enhanced our bilateral relationship, proving again that through focus and hard work we ' re achieving real results for Canadians.”

 More information is available at:

 

http://www.dfait-maeci.gc.ca/eicb/softwood/SLA-main-en.asp.

 

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For further information, media representatives may contact:

 

Robert Klager

Director of Communications

Office of the Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics

613-996-8605