Canada Optimistic About Resolving Lumber Dispute With U.S.
26 April 2017 - 3:40PM
Dow Jones News
By Paul Vieira
OTTAWA -- Canadian Foreign Minister Chrystia Freeland voiced
confidence Wednesday about the ability of Washington and Ottawa to
strike a new deal on softwood lumber and put a quick end to the
latest flare-up in the decades-old trade row.
"A negotiated deal is achievable and there is a deal to be had,"
Ms. Freeland told reporters in Canada during a conference call. "We
have made progress in our conversations, but we are not there
yet."
Her optimism builds on a statement released Tuesday night by the
office of Canadian Prime Minister Justin Trudeau which summarized a
phone call between the Canadian leader and President Donald Trump.
In the phone call, according to a statement from Mr. Trudeau's
office released late Tuesday, the prime minister and Mr. Trump
agreed on the need for a separate, bilateral deal covering lumber
trade, given the close integration of the two North American
economies.
This week, the Commerce Department unveiled a 20% countervailing
tariff on imports of Canadian softwood lumber, after a probe
determined Canadian imports were harming U.S. lumber producers. The
U.S. industry has long complained Canadian governments unfairly
subsidize their domestic producers.
Ms. Freeland said Wednesday she spoke at length with U.S.
Commerce Secretary Wilbur Ross earlier this week, adding
conversations have often been "detailed and substantive" on lumber.
During her talks, she relayed to Mr. Ross that the best outcome for
both economies is a negotiated settlement as soon as possible.
"Middle-class Americans who want to buy a house need Canadian
lumber do that. And the U.S. industry does not produce enough
lumber to meet U.S. needs," she said.
The National Association of Home Builders estimates higher
lumber prices this year have added about $3,000 to the cost of
construction for a typical single-family home. The new tariff
threatens to push the cost of housing further upward, Ms. Freeland
warned.
The duties on Canadian lumber were largely expected after a
previous agreement expired and Mr. Trump's administration didn't
resolve the dispute through negotiations.
"What we had tried to do was to clear the air and get this
dispute out of the way before the big" talks regarding the North
American Free Trade Agreement started, Mr. Ross said. "That was not
possible to achieve."
The softwood tariff marked an escalation in rhetoric from the
White House over Canada's unfair trade practices when it comes to
lumber and dairy. Until recently, most of Mr. Trump's criticism
over Nafta has focused on Mexico, which runs a large trade surplus
with the U.S. In contrast, the U.S. trade deficit with Canada is
relatively small, and economists at BMO Capital Markets note the
U.S. runs a trade surplus with Canada if energy is excluded.
Mr. Trudeau told Mr. Trump he "refuted the baseless allegations"
that underpinned the Commerce Department's decision to impose new
tariffs, according to the summary of the phone call released by his
office.
Further tariffs on Canadian lumber remain a possibility as the
department continues another, separate investigation on allegations
Canadian producers sold products into the U.S. below cost. A
decision on that probe is due in June.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
April 26, 2017 10:25 ET (14:25 GMT)
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