Senators to Froman: Lumber Deal Should Cap Canadian Exports at Specific US Market Share

A group of 25 senators led by Ron Wyden, D-Ore., and Mike Crapo, R-Idaho, urged the Office of the U.S. Trade Representative to conclude a new U.S.-Canada Softwood Lumber Agreement (SLA) that will limit Canadian lumber exports to an agreed-upon U.S. market share, adding that Canadian imports “are capturing an ever larger market share,” which seriously imperils U.S. mills, workers and communities. In a letter to U.S. Trade Representative Michael Froman (here), the senators said only a long-term agreement would materialize into anything impactful. “The now-expired 2006 trade agreement became an ineffective framework for managing subsidized Canadian lumber trade as market realities changed since that agreement was put in place,” the letter says. “A truly durable solution cannot be based on an outmoded framework that does not offset the harmful effects of subsidized Canadian lumber in impaired or unfairly traded imports.”

The previous nine-year 2006 SLA, which expired in October 2015, directed straight-up tariffs of up to 15 percent for western province softwood exports to the U.S. and a quota for exports from eastern provinces of between 30 percent and 34 percent of U.S. overall softwood consumption. Canada is proposing to cap that quota at 30 percent, and to assess a 0 to 25 percent tariff rate for exports from western provinces to the U.S., an industry representative has said (see 1606300036). If the U.S. and Canada don’t reach agreement, U.S. trade laws should be fully enforced against “unfairly traded imports, including softwood lumber,” the senators said. The U.S. lumber industry may bring antidumping and countervailing duty cases on Canadian softwood lumber beginning in October.

The U.S. Lumber Coalition on July 19 commended the senators for championing the domestic lumber industry. “The U.S. lumber industry’s overarching goal is to restore an environment in which it can invest, grow to its natural size, and better be able supply the U.S. market – which will help restore the thousands of jobs lost to unfair trade, and can only happen if the domestic industry is not being impaired by unfairly traded imports,” the coalition said (here). USTR did not comment.