Canada set to fight in court if there’s no deal on softwood: envoy

WASHINGTON As softwood negotiations with the United States languish, the Canadian government says it’s readying itself for the next phase of the lumber fight, which has historically been a necessary step in resolving this recurring dispute: litigation.

Canada’s ambassador to Washington says the two governments have been working hard to get a deal and will continue to do so, but, with U.S. industry resistant to an agreement, he says the Canadian side is prepared to fight in court.

“We’re going to try really hard in the next little while to get a fair and balanced agreement with the United States,” David MacNaughton said Thursday at an event attended by provincial representatives. “If that is not possible, we have all agreed that we will take all necessary steps to litigate this matter until we get a fair arrangement as we have in the past.”

It wouldn’t be the first time. The issue has regularly gone to court over the decades. The irony this time is that the fight would likely be playing out in dispute-resolution panels under NAFTA’s Chapter 19 — at the very moment U.S. negotiators are asking Canada to end Chapter 19.

That’s one reason both countries worked to get a softwood deal before NAFTA talks began this month — but ultimately failed.

MacNaughton laid blame upon the American lumber industry, which he accused of spreading false information and stymying an agreement. The industry is a player in these talks: part of any deal would require it to forsake trade actions for the duration of the agreement.

The historical pattern of the softwood dispute involves the U.S. industry launching complaints over what it calls unfair subsidies, the U.S. authorities imposing tariffs and the issue dragging out for years, through court fights.

MacNaughton said the American lumber lobby is falsely telling people two things: that Canada hasn’t agreed on a cap; and that the provinces are split on the details of a deal.

“That’s simply not true,” the ambassador said.

He has already told The Canadian Press that Canada has agreed to cap its exports to about 30 per cent of the U.S. market.

He says the only thing Canada is asking for is the ability to expand that cap when the market is so hot the U.S. cannot supply the other 70 per cent.