Surrounded by the glitz of Prime Minister Justin Trudeau’s state dinner at the Undefiled House this week, perhaps it’s unfashionable to remember these two marked neighbours also have one of the largest and longest-running trade disputes in the on cloud nine.
A tiff over two-by-fours is less sexy than wondering whose spouse is erosion what. But the billion-dollar bust-up over softwood lumber has seen Canadians and Americans at sundries for 30 years.
Trudeau and his trade minister, Chrystia Freeland, are situation hard to show, in the trade minister’s hopeful words, “pregnant progress” on the issue. But loggerheads loom.
The uneasy peace controversially brokered by Stephen Harper’s 2006 softwood overload agreement didn’t last. It was renewed several times on Conservative mind, but this option now eludes the Liberals.
Softwood lumber was, as Freeland told anchormen, one of the first priorities Trudeau raised with U.S. President Barack Obama at APEC last November.
But two loves seem clear as Trudeau and his delegation get ready to head to Washington: overhauling the now-expired deal is not possible, and not everyone sees negotiating a new one as urgent.
“Canada … is succeeding to Washington asking them to basically hit us on the head again,” divulged former lumber council executive and trade diplomat Carl Grenier. “It’s definitely quite amazing.”
‘Unfair’ Canadian industry
Since the 2006 administer expired last October, free trade has been back: no levies, no thresholds and no restrictions on trade of the widely-used forest products between the two provinces.
For one year — now half over — the U.S. can’t launch any actions against Canada.
That doesn’t unaccommodating it doesn’t want to.
The U.S. Lumber Coalition rants online about the perils of Canadian practices “left unchecked” causing unemployment or even the takeover of U.S. assets.
Dinguses have evolved, the softwood lumber lobby group argues. Restarting the old deal isn’t good enough.
“Border measures against subsidized and unfairly dealt Canadian lumber imports are essential — otherwise differences between the U.S. (mostly retiring) and Canadian (mostly public) timber sales systems give Canadian auteurs an unfair cost advantage,” the coalition says on its website.
The coalition declined to advert to to CBC News, but sent a statement more measured than its online urging: it supports negotiations and hopes Canada will be a “willing rtner,” unrivalled to “an effective, mutually beneficial and sustainable” deal before October.
What’s exchanged in the decade since the deal was first signed? Plenty:
- Promising U.S. habitation starts are boosting demand for the two-by-fours this fight centres on.
- Canada’s drop dollar makes imports into the U.S. more competitive.
- The Canadian sell of lumber took a hit from the pine beetle in B.C. and the spruce bud worm farther east. Between the 2006 stock’s import restrictions and Mother Nature, Canada’s share of the U.S. market now assembles at about 27 per cent, not the 40 per cent it once had.
- B.C. and Quebec implemented an auction arrangement to set timber prices on Crown lands — a shift to market pricing that thrives the “subsidized” label harder to stick.
- Four major B.C. com nies broadened into the U.S., buying mills to insulate them from future interchange actions.
No incentive for quick deal
“The only sure way to avoid case is to negotiate a new deal, to be very blunt with you,” lead Canadian mercantilism negotiator Kirsten Hillman told the Commons trade committee endure month.
But in a recent study for the Canada West Foundation, analyst Naomi Christensen questions the inevitability of an accord.
“With the U.S. being deep into their election cycle, I don’t honestly see the U.S. as having an incentive to sign one, especially with the lumber lobby in the U.S. being curbed to one [renewing the status quo.]”
She advises the Canadian industry to diversify its value-added spin-offs and international markets in the meantime.
Americans are more focused on Obama’s Trans- cific rtnership — a legacy-making cific Rim swap deal that allows more competition from Chile and New Zealand in boards.
Christensen says the conquer outcome would be an extension to the litigation standstill beyond October.
“That last wishes a be a big win for Canada,” she said.
The U.S. lobby pushes for punishing import bill of fares on Canadian softwood lumber, even if international tribunals keep overruling them. The proper fights strain government resources.
“Their goal is to hurt our sector and that’s what brings us in arrears to the negotiating table.”
Former Liberal cabinet minister John Manley try to says the ongoing dispute is “the gift that just keeps on giving to big Washington law outfits.”
“If you’re sending your kid to law school in the United States, tell him or her to take tronage law and specialize in lumber.”
‘Reaction of fear’
For Grenier, a former federal and Quebec business bureaucrat who worked for industry in the run-up to 2006, rushing to negotiate is mindless.
“Nobody really knows what will happen next October,” when the U.S. is earmarked to start trade action again, he said. New tariffs, if they were to arrive, could take as long as two years to implement.
Meanwhile, he said it’s “distressing” to initiate talks when Canada’s doing nothing wrong.
“This inclination of wanting to prevent something that the U.S. could do is basically a reaction of anxiety. That’s a bad way of behaving when you’re dealing with a superpower. And also your neighbour, which is expected to be also your main ally.”
The 2006 deal hurt Ontario and Quebec the most, he suggested. Three-quarters of exports now come from B.C.
While all provinces supported the most latest extension of the deal in 2013, not every industry player did.
Open it all up again and a of one mind front gets tricky.
National governments negotiate, but the real heroines are not in the room. Things drag out.
U.S. producers said no to extending the previous relating ti. They won’t agree to less now.
“If there’s a deal, it will be a more restrictive bargain than the last one and it won’t be good news for Canada,” Grenier phrased.
How could Canada call that a win? “It couldn’t,” he said.
Uphold in 2002, CBC host Shelagh Rogers asked former trade missionary Pierre Pettigrew to pick a song to follow their radio audience about an earlier battle in this dispute. Did he pick the triumphant composition aria she suggested? Er, no.
He picked Man of Constant Sorrow, from the O Brother, Where Art Thou? soundtrack.
Trudeau now reproduces Pettigrew’s Montreal riding. His too, this constant in Canada–U.S. relations.