U.S., Canada extend softwood lumber pact

Trade officials from the United States and Canada have extended their Softwood Lumber Agreement for two more years. The 2006 agreement was signed with no changes on Jan. 24 by U.S. Trade Representative Ron Kirk and Canadian Minister for International Trade Ed Fast. The extension will be in effect through Oct. 15, 2015.

In an official statement, Ambassador Kirk said: “The Softwood Lumber Agreement is very important for U.S. producers, particularly when both sides of the border are facing weak demand. Trade agreements are about providing a predictable and fair environment for conducting international trade.”

The statement added that the U.S. was “pleased to have agreed with Canada to extend the SLA well before its initial expiration date, to ensure predictability and stability in the sector. The U.S. intends to consult with Canada before the extended expiration date on whether a further extension is in the interest of both countries.”

Originally set to expire in 2013, the agreement addresses Canadian lumber tariffs that have been a source of contention between the two countries for years. American manufacturers claimed they were undercut on price by Canadian mills, which are subsidized by their provincial governments through cheap logging fees. Canadian producers deny the charges and accuse the Americans of being anti-free trade.

Under the pact, the U.S. agreed to stop imposing anti-dumping and countervailing duties upon lumber from Canada. In return, Canada agreed to apply export charges and limitations to its softwood lumber shipments when the price falls below a certain level.

Relations have still been rocky, however. There have been several disputes over the interpretation and implementation of the agreement, most of them involving U.S. producers accusing Canada of miscalculating it quotas or undervaluing its timber.