OTTAWA – The United States has responded to Canada’s mighty roars in the softwood lumber dispute with a deafening yawn.
But as Ottawa makes rumblings about trade retaliation and the prime minister prepares to weigh in, the Americans are holding out the hope of a negotiated settlement.
Canada won what it says is a major victory this past week when a NAFTA panel dismissed Washington’s claims that Canadian softwood exports are subsidized and damage the U.S. lumber industry. The issue is of interest in Maine because a lively lumber trade has existed between Maine and border provinces for generations.
International Trade Minister Jim Peterson immediately called on Washington to concede defeat and return about $5 billion in countervail and antidumping duties collected from Canadian companies.
The U.S. refused, saying the ruling is not the end of the matter because it does not deal with a 2004 decision from the U.S.-based International Trade Commission. That decision supported the American case, although it’s believed it and other earlier decisions have all been trumped by the NAFTA conclusion.
Peterson and several cabinet colleagues expressed outrage. They issued a statement calling on the U.S. to “do the right thing” by accepting the NAFTA ruling. They said the American position raises questions about Washington’s commitment to the North American Free Trade Agreement.
Peterson followed that up with a call to his American counterpart, U.S. Trade Representative Rob Portman. A spokeswoman said the minister told Portman that Canadians are outraged with the U.S. blatant disregard for NAFTA rules and that the $5 billion in duties must be returned.
Peterson also warned that Ottawa is prepared to “take all measures necessary,” including the possibility of trade retaliation.
Both did agree that the dispute must end soon and that negotiations will continue within two weeks. In the meantime, Canada is girding for battle.
“We have already begun the process of getting permission from the (World Trade Organization) to implement punitive measures against the Americans,” Peterson said.
The U.S. issued a statement late Friday aimed at easing Canadian concerns, while offering no real movement.
“Ambassador Portman spoke with minister Peterson yesterday. It was a cordial and candid conversation,” the statement said. “Ambassador Portman conveyed the respect the United States has for the NAFTA process … Ambassador Portman reiterated that it is in the interest of the United States and Canada to reach a permanent negotiated solution.”
The U.S. industry has long claimed that Canadian producers are unfairly subsidized through low fees paid to governments for timber.
Canadian softwood producers sell about $10 billion worth of spruce, pine and fir lumber a year to the U.S. home-construction and renovation sectors.
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