Canadian government warns U.S. senators of potential lumber dispute consequences

WASHINGTON — The Canadian government is warning U.S. politicians about the consequences of a possible new softwoodlumber dispute.

A letter from International Trade Minister Chrystia Freeland and David MacNaughton, the Canadian ambassador to Washington, went out today to two dozen senators — with a copy to U.S. President Barack Obama.

The letter says American lawmakers are being misled by their domestic lumber lobby about what’s been delaying a new softwood agreement since the expiry of the previous decade-old deal.

It says the Canadian side has acted in good faith, meeting U.S. officials seven times and U.S. lumber lobbyists twice, and releasing four position papers, along with a detailed proposal that meets conditions set out by Obama and Prime Minister Justin Trudeau.

But it accuses the lobby group, the U.S. Lumber Coalition, of inflexible protectionism, with demands that would reduce the Canadian share of the U.S. market by 30 per cent.

It points to estimates from a U.S. homebuilders’ organization of the damage its proposal would cause Americans themselves: well over $1 billion a year in housing investment and more than 9,000 fulltime jobs.

”Such an approach would cause widespread shortages of lumber in the United States and greatly increase prices for consumers,” says the letter, dated Oct. 26.

”We remain determined to reach a fair and reasonable arrangement.”

Softwood lumber was excluded from Canada-U.S. free trade deals, causing periodic flareups over that product. The dispute is rooted in the longstanding contention of American lumber companies that Canadian competitors get an unfair price advantage, because of cheap, market-distorting access to public land.

That has caused a recurring cycle of lawsuits, U.S. tariffs, appeals to international trade bodies, followed by agreements that temporarily bring peace through a series of measures limiting Canadian exports.

The latest agreement was reached in 2006, and it just expired.

Canadian Press