Canada open to NAFTA deal on wood

The Prince George Citizen - - FRONT PAGE - Alexan­der PANETTA

WASH­ING­TON — Canada is pre­pared to pur­sue a per­ma­nent set­tle­ment in softwood lum­ber within the North Amer­i­can Free Trade Agree­ment if the U.S. lum­ber in­dus­try keeps block­ing a deal, Canada’s am­bas­sador to the U.S. sug­gested Thurs­day.

David MacNaughton ex­pressed frus­tra­tion at the in­dus­try us­ing what is ef­fec­tively its veto power to block any deal be­tween the na­tional govern­ments and he raised the pos­si­bil­ity of work­ing around it to achieve a long-term so­lu­tion.

Free trade in softwood lum­ber has never been part of any con­ti­nen­tal trade pact and the Cana­dian gov­ern­ment has been wary of in­ject­ing it into this cur­rent ne­go­ti­a­tion, fear­ful that adding a con­tentious is­sue would make the al­ready com­plex talks that much more dif­fi­cult. But that could change. “We’re open to any­thing that’s go­ing to re­solve it. Be­cause it’s just crazy right now,” MacNaughton said, when asked about adding softwood into NAFTA.

“I’m pre­pared to look at any­thing that’s go­ing to re­solve it. I just think it’s go­ing to be dif­fi­cult to put another thing – another con­tentious el­e­ment into NAFTA. I think we’re bet­ter off to re­solve it out­side of the NAFTA frame­work.”

The rea­son the U.S. in­dus­try has veto power over any deal is that part of any softwood agree­ment would re­quire it to sign away its right to launch trade ac­tions against Canada.

The Amer­i­can in­dus­try al­leges un­fair sub­si­dies in Canada and about once a decade launches trade ac­tions, which lead to du­ties on lum­ber im­ports, higher prices, and years of in­ter­na­tional lit­i­ga­tion, be­fore there’s a new tem­po­rary deal.

MacNaughton ac­cused the in­dus­try of drag­ging its feet be­cause it serves its own fi­nan­cial in­ter­est: “They’re mak­ing a lot of money right now,” he said dur­ing a pub­lic fo­rum or­ga­nized by Politico.

He called it un­for­tu­nate that U.S. con­sumers have no say over this process – such as home­own­ers, and home­builders, now fac­ing a na­tional short­age of wood that will only be com­pounded by the mas­sive task of re­build­ing many thou­sands of homes dam­aged by hur­ri­canes.

MacNaughton said he be­lieves the U.S. gov­ern­ment is work­ing to bring in­dus­try to the ta­ble.

He cred­ited U.S. Com­merce Sec­re­tary Wil­bur Ross for his mastery of the file, and said that’s one rea­son he’s wor­ried about shift­ing the lum­ber talks to a new fo­rum.

The NAFTA ne­go­ti­a­tions are be­ing led by U.S. trade czar Robert Lighthizer; the lum­ber talks are be­ing led by Ross.

On Thurs­day, the com­merce sec­re­tary un­der­scored his de­sire for a quick deal. In a meet­ing with On­tario Premier Kath­leen Wynne, he ap­par­ently re­ferred to the ur­gency caused by hur­ri­canes that have rav­aged Texas, Florida and Louisiana.

“Sec­re­tary Ross him­self brought Work­ers sort and move lum­ber at the Delta Cedar Sawmill in Delta on Jan. 6. up the re­al­ity that there’s a lot of re­build­ing that’s go­ing to have to be done over the next months, and quite frankly years,” Wynne said in an in­ter­view af­ter her meet­ing with Ross in Wash­ing­ton.

“So this is an ur­gent is­sue, from our per­spec­tive.”

That sen­ti­ment was echoed by Canada’s nat­u­ral re­sources min­is­ter. Jim Carr said de­mand for wood prod­ucts to help re­build will put pres­sure on the par­ties to get a deal. Carr made the com­ments in Ot­tawa at a meet­ing of the Cana­dian Coun­cil of For­est Min­is­ters.

“We... know that Cana­dian pro­duc­ers of­fer a very, very good sup­ply of Cana­dian lum­ber in the United States,” Carr said. “That’s an eco­nomic re­al­ity. I mean, mar­ket forces are im­por­tant. So we think it al­most cer­tainly will have some im­pact on think­ing.”

On Wed­nes­day, Paul LePage, the Repub­li­can gov­er­nor of Maine, asked the U.S. to at least sus­pend the tar­iffs un­til the hur­ri­cane re­build­ing has been com­pleted.

LePage said “cor­po­rate greed from a coali­tion of big lum­ber com­pa­nies” has al­ready sent softwood mar­ket prices soar­ing.

“Mak­ing a profit is the goal of any com­pany – and it should be,” LePage wrote in an op-ed in The Maine Wire. “But it is un­con­scionable that this coali­tion is in a po­si­tion that could lead to price­goug­ing Amer­i­cans in dis­tress.”

The Na­tional As­so­ci­a­tion of Home Builders in the United States made a sim­i­lar plea to the White House ear­lier this month.

— With files from Mia Rab­son

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