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Canadian US Softwood lumber thread

 
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Canadian US Softwood lumber thread Can't Post
Discuss the latest and the worst and the best of the possible deal and eventual deal.

The paperwork on final agreement on the softwood lumber dispute between Canada and the United States is being circulated to lumber-producing provinces and other players. The end may be close, but then again, maybe not.

The two sides announced a preliminary agreement in late April and have been working since then reach a final deal.

The government is circulating a draft final text of the truce, the text has been sent to provinces and stakeholders for feedback. If plans go as scheduled, Canada's International Trade Minister David Emerson and U.S. Trade Representative Susan Schwab would initial the deal as early as Saturday in Geneva, Switzerland, where they are currently attending WTO talks.

Some observers say the deal is unlikely to be inked until Harper and his American counterpart meet. The PMO wouldn't confirm an agreement but said progress had been made.

Naysayers, including opposition parties and some industry stakeholders, have accused the Tory government of rushing to set a deal since an initial framework was announced April 27.

Some have expressed concern Canada is being forced to make too many concessions to the U.S. side. but others are eager to get back billions of dollars in duties.

Under the proposed deal, the U.S. would lift punitive anti-dumping and countervailing duties first imposed on Canadian lumber duties since 2002.

In its place, Ottawa would impose an export tax at the border, which would vary according to lumber prices, export levels and the value of the Canadian dollar.

One of the big hurdles is getting the U.S. to return about 78 per cent of the $5 billion it collected duties starting in 2002.

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Mod
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Jul 1, 2006, 1:22 PM

Post #1 of 7 (887 views)

Re: [Mod] Canadian US Softwood lumber thread [In reply to] Can't Post
Ottawa is running into resistance amid efforts to finalize a softwood lumber deal PM Harper visits the White House July 6. Apparently the provinces are not happy with the latest installment and have slowed the process.

Ottawa and Washington reached the framework of a deal in late April and have been struggling since then to flesh out details of a final text. The initial agreement called for the removal of duties averaging more than 10 per cent on Canadian softwood lumber in return for Ottawa imposing limits and export taxes on U.S. bound timber. It also calls for the return of about 80 per cent of the $5-billion (U.S.) in punitive tariffs that Washington has slapped on Canadian timber imports since 2002.

Ontario's Natural Resources Minister David Ramsay, who had been briefed on the text, said in a phone interview with the Canadian Press he was surprised the final draft includes a provision that could result in the accord being suspended after just two years.

Mr. Ramsay said he's disturbed with the insertion of provisions that could result in the softwood lumber agreement could be terminated within two years--originally thought to be seven.

In Vancouver, the BC Lumber Trade Council said more talks are needed to achieve a final agreement that allows the province's lumber companies to remain competitive. Any deal which is bound to draw criticism from some quarters of Canadian industry that Ottawa is giving up too much for the sake of peace.

The earliest all could end is when Parliament returns Sept. 18 in order to pass a motion enacting the export tax central to the agreement. So in effect they could not enforce the terms of the deal until then.

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Mod
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Jul 1, 2006, 1:29 PM

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Re: [Mod] Canadian US Softwood lumber thread [In reply to] Can't Post
Negotiators have worked out the final language of the U.S.-Canada softwood lumber deal. The trade ministers should sign it in Geneva and then Prime Minister Stephen Harper and U.S. President George Bush are to meet in Washington; they will sign the deal at that time.

The accord will allow the U.S. to keep about $1 billion US of $5 billion that country has collected since 2002 through penalties on softwood lumber exports. The deal limits Canadian shipments of lumber southward if U.S. lumber prices begin to fall. It will also end any new anti-dumping actions by U.S. producers.

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Barry
Mr. Do It All


Jul 2, 2006, 2:53 PM

Post #3 of 7 (881 views)

Re: [Mod] Canadian US Softwood lumber thread [In reply to] Can't Post
Canadian Industry Minister David Emerson says those who oppose the softwood lumber deal must be willing to take responsibility for the effect its death would have on the industry. (An apparent shot at Liberals ready to oppose the deal in parliament.)

The deal, signed July 1, would allow the U.S. to keep about $1 billion US of the $5 billion it has collected in penalties on Canadian softwood since 2002. It would also limit Canadian exports to the U.S. if American lumber prices begin to fall. THe problem? The agreement requires 95 per cent support from the industry before it becomes binding.

Emerson said he has no plans to re-visit the deal, despite recent complaints from the federal opposition, some elements of the industry and the even the B.C. government.
A number of politicians and members of the industry were surprised to learn that the agreement includes an escape clause that would allow either side to walk away after 36 months.

Emerson noted that he and his staff have met with many interested parties throughout the negotiations and have "captured 90 per cent of the issues we need to confront." However, he acknowledged the deal requires more than 90 per cent support form the industry to go through, and said companies will have to make the decision that is best for them.

For the deal to pass, the softwood lumber industry must agree to drop litigation efforts against the U.S. Critics have trouble with the termination clause, claiming it will allow the U.S. to pull out of the deal whenever it feels inclined to do so. Still, some rough waters for Emerson.

econmod
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Jul 11, 2006, 12:11 PM

Post #4 of 7 (862 views)

Re: [Mod] Canadian US Softwood lumber thread [In reply to] Can't Post
According to some, the WTO lumber agreement ready to take effect favour Canada. A WTO panel recently overturned a previous ruling that permitted the US commerce Dept. right to use 'zeroing' as a method to determine anti dumping duties. Canada said this process inflated the results, and US said it didn't. In the end, the WTO ruled in favour of the Canadians. The WTO flipflopping between rulings makes one side happy for a time being, and then bitter enemies months later.... :P

econmod
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Aug 16, 2006, 5:30 PM

Post #5 of 7 (818 views)

Re: [econmod] Canadian US Softwood lumber thread [In reply to] Can't Post
The Bloq supported the Conservative motion and the softwood lumber deal went through parliament. That was a few weeks ago. Now the latest:

The Canadian government apparently won't meet its self-imposed Oct. 1 deadline to implement the softwood lumber agreement with the United States. Complications regarding the withdrawal of more than 30 pieces of trade litigation, including resistance by some exporters to shelving their suits, make it unlikely a planned softwood border tax will start being levied.
The US demanded that all trade litigation be withdrawn as a precondition for lifting punitive lumber duties.If Ottawa moves ahead as planned and the U.S. duties remain in place, lumber shipments would find themselves facing a 15 per cent export tax as they leave Canada and a 10.8 per cent import duty when they cross into the United States.

econmod
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Sep 28, 2006, 12:32 AM

Post #6 of 7 (749 views)

Re: [Mod] Canadian US Softwood lumber thread [In reply to] Can't Post
This delay in implementing the Canada-U.S. Softwood Lumber Agreement is angering American lumber producers. The Coalition for Fair Lumber Imports said that Canadian exporters are taking advantage of the delay to flood the US market with lumber before export taxes kick in under the agreement.
The strategy is accelerating and deepening a downturn in a U.S. lumber market already weakened by a drop in demand as housing starts decline, the coalition said in a news release.The coalition's outburst does not signal that the agreement negotiated last summer is in jeopardy, said Bob Klager, communications director for International Trade Minister David Emerson.
"Certainly we're discussing with the United States the challenges of implementation confronting the industry on both sides of the border,'' Klager said from Ottawa.
Canadian industry sources also say it's not clear whether enough U.S. producers have signed letters withdrawing their claims of injury from Canadian lumber imports to satisfy one of Canada's demands in the agreement.
Klager challenged the coalition's claim that Canadian exporters are flooding the U.S. market in advance of the deal's implementation.
The export date for the first eight months of this year shows lumber shipments are down nine per cent over the same period last year, he said.
Canadian companies must sign waivers agreeing to accept about 80 per cent of their refunds -- in a program administered by the Export Development Corp. -- to satisfy that clause in the deal.
The border tax kicks in when the industry benchmark Random Lengths composite framing lumber price drops below US$355 a thousand board feet and maxes out at 15 per cent when the price is US $315 or lower.
The latest Random Lengths composite price is US$274 and the key price for western spruce-pine-fir lumber is US$248, the lowest since early 2003. Factor in the dollar price and its even lower. (BTW, DiscussEconomics couldn't care less if the lumber industry died tomorrow if they relied upon the dollar as the means to derive primary profits.)

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Mod
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Oct 2, 2006, 11:47 PM

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