WASHINGTON – A Bush administration plan to drop tariffs on Canadian softwood lumber and move to a free market system drew the support of Sen. Olympia J. Snowe, R-Maine, who said she remains committed to leveling the playing field for American timber producers.

“A resolution to the softwood lumber dispute is a step in the right direction,” said Snowe, who serves on the Senate Finance Committee. “However, Canada must now commit itself to ending unfair subsidies of its lumber industry, and if Canada does not agree, sanctions should remain in place to the fullest extent of the law.”

The plan drew the ire of the Finance chairman, Sen. Chuck Grassley, R-Iowa, because it does not move quickly enough to end tariffs and may hurt consumers in the end, he said.

Grassley claims the Bush administration may be entertaining a plan that would use an interim quota system while it undertakes reforms and begins to drop countervailing duties on softwood timber.

“The American consumer ends up paying the price for this type of arrangement,” said Grassley. “A quota likely would cause lumber prices to increase as supplies diminish. Higher lumber and construction costs would do nothing to prevent economic anxiety.”

Rep. Michael Michaud, D-Maine, also is in support of the plan.

Michaud spokesperson Monica Castellanos said the congressman “would hope that we could get to a point where we are trading on a fair basis” with Canada. She added that Michaud has always been a supporter of Maine’s timber industry and would support the Commerce Department in its goal to produce fair trade.

In a June 24 policy paper, the Department of Commerce outlines a reform plan to “create economic conditions under which lumber producers and timber markets throughout North America would face the same competitive pressures.”

U.S. timber producers currently enjoy tariff protection from Canadian government-subsidized lumber, which critics charge inflates the price for consumers.

Under the administration’s plan, provincial governments in Canada would submit an application to have the duties dropped after an inspection determines if the lumber is produced in fair-market conditions.

The Commerce Department would review the application on two key criteria. First, that the province had removed all or virtually all of the constraints on companies operating in the province that prevents them from adjusting to changing market conditions. Second, that an auction system had been introduced to establish market prices on the lumber.

The government plans to accept comments on the proposal, which will be posted on the Federal Register by June 29, until July 25.

If the province were found to meet those criteria the duties would be revoked.

Snowe said that there are still issues to be worked out in the proposal, including the special status of Maine’s border mills, which already use unsubsidized Canadian lumber. A spokesperson said she wants to ensure no duties are placed on that lumber.