Senator Snowe Applauds U.S. Arbitration Request Over British Columbia Timber Subsidies

WASHINGTON, D.C. (January 18, 2011) – U.S. Senator Olympia J. Snowe (R-Maine) today applauded the announcement of United States Trade Representative Ron Kirk that the U.S. has requested arbitration with Canada over concerns about British Columbia’s timber price subsidies, which disproportionately harm lumber producers in Maine and across the nation.   Senator Snowe was the first Member of Congress to publicly call on the Obama Administration to initiate the dispute resolution process over BC’s unfair trade practices, and has been calling for this critical next step in the process outlined in the 2006 Softwood Lumber Agreement between the U.S. and Canada.   Since then, Members of Congress from across the country have joined Senator Snowe in requesting the Administration to hold British Columbia accountable for repeatedly circumventing its obligations under the Softwood Lumber Agreement.

“Today’s announcement that the U.S. has requested arbitration in this longstanding dispute over British Columbia’s unfair timber price subsidies is certainly welcome news – particularly for workers and their families in Maine – and I could not be more pleased that the U.S. Trade Representative has taken this crucial next step,” said Senator Snowe.   “After years of litigation, the U.S. and Canada entered into the 2006 Softwood Lumber Agreement to level the playing field for U.S. lumber producers by imposing a moratorium on Canadian lumber subsidies.   Yet, there are strong indications that British Columbia continues to violate our trade rules.   For example, much of British Columbia’s government-owned timber used in home construction has sold for 25 cents per cubic meter. In contrast, equivalent quality logs cost an estimated $20 per cubic meter in the open U.S. market – putting mills in Maine at a severe disadvantage.”

As a senior member of the Senate Finance Committee, which has jurisdiction over trade policy, Senator Snowe has long championed policies to level the playing field for American workers in trade-sensitive industries.   In a February 12, 2009 letter, Senator Snowe called on President Obama to address the terms of the 2006 Softwood Lumber Agreement during his scheduled meetings with Canadian Prime Minister Stephen Harper in Ottawa.   Since then the Office of the U.S. Trade Representative, the Obama Administration’s trade policy arm, has been examining whether British Columbia’s timber price reduction policies are in violation of the 2006 trade pact and Senator Snowe has been a strong proponent of using the agreement’s dispute resolution process to remedy the harm done to Maine’s softwood lumber industry.

“When President Obama met with Prime Minister Harper in Ottawa soon after his inauguration, I stressed that our government must object forcefully to ongoing violations of the Softwood Lumber Agreement.   Since then, I have repeatedly pressed U.S. Trade Representative Ron Kirk to closely consider the significant impact of these violations on mills here at home.   In July, I asked him to initiate consultations with the Canadian government and after months of delay, on October 8th the Administration finally took the first step in the dispute resolution process by requesting consultations with Canada under the 2006 agreement.   The 40-day consultation period passed without any resolution of this matter and today our government formally requested arbitration proceedings to put a halt to these violations.   These latest developments represent progress – but time is of the essence. Our government must use every tool to fight for what is fair when it comes to British Columbia’s efforts to circumvent the Softwood Lumber Agreement,” continued Senator Snowe.

The venue for arbitration will be a London Court of International Arbitration (LCIA) Tribunal. If the United States prevails, the LCIA Tribunal would order Canada to remedy British Columbia’s past and current breaches of the agreement.