Coalition for fair lumber Imports supports U.S. government action to seek enforcement of Softwood lumber agreement

Aug 08, 2007. /Lesprom Network/. The Coalition for Fair Lumber Imports welcomed on August 7, 2007 the announcement by the United States Trade Representative that the United States has initiated official arbitration proceedings against Canada to resolve issues relating to Canada's non-compliance with certain terms of the U.S.-Canada Softwood Lumber Agreement.

This announcement was accompanied by a U.S initiative to implement measures designed to enhance the monitoring of imports of softwood lumber products from Canada to ensure that they fully comply with the terms of the bilateral agreement. The United States was forced to initiate this arbitration proceeding in light of Canada's repeated refusals to properly implement the agreement. The United States and the U.S. lumber industry have not asked for any concession from Canada, rather they merely demand that Canada honor its commitments. Canada is in clear violation of the agreement as it has: failed to fully collect the required border taxes, including surge taxes on exports from British Columbia and Alberta; failed to properly administer the export quota system; and failed to stop providing new tax payer-funded subsidies to its industry. Under the terms of the agreement, either party can request a binding dispute settlement ruling by the London Court of International Arbitration. A ruling in the favor of the United States would result in significant export tax liabilities for Canadian softwood lumber exporters and a tightening of permissible export quotas to comport with the terms of the agreement.

Currently available data indicate that through May 2007, Canada's mounting under-collection of required export taxes totals at least $116 million and provinces' over-quota shipments is estimated to be 522 million board feet. Coalition chairman Steve Swanson stated that "the Coalition supports the initiatives taken today by the U.S. Government as Canada has unilaterally and without consultation undermined the softwood lumber agreement by refusing to implement key terms." Mr. Swanson continued, "the required tax and quota limits on shipments are essential to remedy Canada's unfair trade practices. Canada's failure to honor its commitments under the agreement continues to severely harm the U.S. lumber industry which is suffering curtailments and layoffs caused by production cutbacks that are occurring at twice the rate in the United States compared to our subsidized Canadian counterparts." In addition to the violations being challenged under the arbitration process, Canada is also failing to honor several other provisions of the agreement.

The Coalition is disappointed that U.S.-Canada consultations failed to resolve Canada's current breaches of the agreement terms. "Canada agreed to a very specific set of terms during the negotiation, and these obligations are clearly reflected in the final text of the agreement. All we ask is that Canada lives up to its commitments and honors the terms of the agreement. We will continue to defend our rights by working with the U.S. government to ensure that we get everything we bargained for," concluded Mr. Swanson. The U.S. Coalition for Fair Lumber Imports is an alliance of large and small lumber producers from around the country, joined by hundreds of thousands of their employees, and tens of thousands of woodland owners. The Coalition is united in opposition to Canada's unfair lumber-trade practices, including its gross under-pricing of timber.