US-Canada softwood lumber dispute: "significant differences" toward a new agreement

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The U.S. and Canada have "significant differences" toward a new softwood-lumber trade agreement, after negotiation between the two countries. U.S. Trade Representative Michael Froman and Canadian International Trade Minister Chrystia Freeland released a joint statement Friday stressing that negotiations continue on what they described as an important part of both economies.

"While significant differences remain between us, this period of intensive engagement has helped define shared goals and explore options for several key components of any new agreement," Froman and Freeland said. "The United States and Canada are committed to continuing negotiations in an effort to achieve a durable and equitable solution for North American softwood lumber producers, downstream industries and consumers."

Sawmills and jobs all around Canada may be seriously affected by the possibility of the US duties imposed on imported softwood lumber.

It’s possible that the US imposes duties of nearly 25% by mid-2017, which will put a big pressure on Canadian producers. They will have to shut down the mills because they won’t be able to make the money required to pay the duties, as RBC Capital Markets analyst Paul Quinn explained.

As reported by Black Burn News, nearly 5 mills in BC might be closed. Moreover, Resolute Forest Products stated that many jobs would be affected if Canada accepts the US 24% quota on the Canadian imports. Apparently, the market isn’t big enough to sustain the selling of products so the capacity of the mills might be closed.

Resolute Forest Products believes that the forestry system in Quebec is market-based and so the government should insist on free trade. A spokesman for the company said that Canada is now negotiating against its interest and it shouldn’t rush for an agreement with the US.

US President Barack Obama and Canada’s Prime Minister Justin Trudeau will meet on the 29th of June during the so-called Three Amigos Summit with Mexican President Enrique Pena Nieto. This is the term for the 100 days set period for reaching an agreement regarding the softwood lumber trade. Yet, no resolution is expected.

On the other hand, the B.C. Lumber Trade Council says it believes a new agreement, if properly designed, could provide certainty and stability for lumber producers on both sides of the border, according to Black Burn News.

If a new agreement isn’t reached by October 2016, the US producers will impose new duties on Canada’s softwood lumber imports.

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