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<html> <head> <meta name="generator" content="Corel WordPerfect 10"> <meta http-equiv="content-Type" content="text/html; charset=utf-8"> <style> p { margin-top: 0px; margin-bottom: 1px } body { font-family: "Arial", sans-serif; font-size: 12pt; font-weight: normal; font-style: normal } </style> </head> <body> April 27, 2006 (7:25 p.m. EDT) No. 45 CANADA’S TRADE AND INDUSTRY MINISTERS AND AMBASSADOR TO THE U.S. WELCOME LONG-AWAITED AGREEMENT TO END THE CANADA-U.S. SOFTWOOD LUMBER DISPUTE International Trade Minister David L. Emerson, Industry Minister Maxime Bernier and Canada’s Ambassador to the United States Michael Wilson today issued the following statement on the Canada-U.S. Agreement Ending the Softwood Lumber Dispute. “I am pleased to confirm that we have reached an agreement with the United States effectively ending our long-standing dispute over softwood lumber. The Agreement outlines the terms for a fair and durable resolution and reflects Canada’s objectives and interests,” said Minister Emerson. “The Agreement will see not only the revoking of duties but also the return to Canadian lumber producers of at least 80 percent of the deposits collected since 2002,” he added. “For the next seven to nine years, when lumber prices are over US$355 per thousand board feet, no border measures will be imposed. If the softwood agreement were in place today, Canadian lumber would enter the United States without any restriction,” said Minister Bernier. “When prices are lower, a province will be able to choose the export measure that works best for its industry. Moreover, any charges collected will remain in Canada.” “The Agreement also provides for discussions that could lead to provinces exiting from an export measure by implementing domestic policy reforms. Furthermore, certain regions and products will be completely excluded from any border measure,” added Minister Emerson. “These were tough talks, but they were done in good faith. The Agreement will pave the way for a stronger bilateral trade relationship—a relationship upon which so many Canadians depend for jobs and prosperity,” said Ambassador Wilson. “It also sets a positive tone that will allow our countries to move forward in collaborating to make North America more competitive on a global scale.” - 30 - A backgrounder is attached. For further information, media representatives may contact: Jennifer Chiu Press Secretary Office of the Minister of International Trade (613) 992-7332 Isabelle Fontaine Office of the Minister of Industry (613) 797-0761 Media Relations Canadian Embassy, Washington, D.C. (202) 528-2276 Backgrounder THE SOFTWOOD LUMBER DISPUTE   Softwood lumber is one of Canada’s most important export sectors. Lumber exports to the United States were valued at over C$8.5 billion in 2005, representing over 2 percent of Canada’s total exports to the United States. In the same year, Canada exported over 21 billion board feet of lumber to the United States. In 2005, British Columbia accounted for over 57 percent of Canada’s lumber exports to the United States, followed by Quebec (16 percent), Ontario (9 percent), the Maritimes (8 percent), Alberta (7 percent), Saskatchewan (1 percent) and Manitoba (1 percent). Since 1982, a group of U.S. lumber producers, the U.S. Coalition for Fair Lumber Imports, has on four occasions petitioned the U.S. government to impose duties on Canadian softwood lumber imports, alleging that Canadian forestry management practices constitute subsidization of the Canadian softwood lumber industry. In Lumber I (1982), the U.S. Department of Commerce (DOC) dismissed these allegations. Lumber II (1986) led to the imposition of a 15 percent countervailing duty, later replaced by a 15 percent export tax following a Canada-United States Memorandum of Understanding (1986-1991). In Lumber III (1991), the DOC imposed a 6.51 percent countervailing duty, which was eventually revoked following a Canadian legal victory. Following the refund of deposits in Lumber III, the Canadian and U.S. parties agreed to a quota-based Softwood Lumber Agreement (SLA) in September 1996. When the SLA expired in March 2001, the Coalition again sought the imposition of duties against imports of softwood lumber from Canada, launching Lumber IV. The Coalition alleged that Canadian governments (federal and provincial, with the exception of Atlantic Canada) illegally subsidized lumber production and that Canadian lumber was dumped into the U.S. market (i.e., sold in the United States below the cost of production or at prices lower than in Canada). In May 2002, the DOC imposed a combined duty rate of 27.22 percent duties on Canadian softwood lumber imports. The combined rate was lowered through the DOC annual administrative review process in December 2004 to 20.15 percent and again in December 2005 to 10.8 percent. To date, Canadian companies have paid approximately C$5.3 billion in duty deposits. Immediately after the U.S. authorities completed their investigations in 2002, Canada initiated NAFTA and WTO legal challenges of the U.S. final determinations of subsidy, dumping and threat of injury. Canada also has cases before the U.S. Court of International Trade. There have been several cases since then dealing with injury, subsidy and dumping. The United States has requested an Extraordinary Challenge Committee (ECC) in the NAFTA subsidy case, but has indicated that it will not vigorously pursue this litigation during lumber negotiations following the April 27 agreement. The ECC will be subject to termination upon the coming into force of the agreement. Canada will pursue its litigation, and has reserved the right to provide assistance to the lumber industry, pending full implementation of the agreement. Throughout this period, Canada has made numerous attempts to pursue a negotiated resolution, exploring various solutions including provincial policy reforms and export tax regimes. Negotiators met most recently for formal negotiations in July 2005. At the NAFTA Leaders Summit in Cancun on March 30-31, 2006, Prime Minister Harper and President Bush expressed their commitment to see a resolution to the softwood lumber dispute and both leaders instructed their officials to examine the options for pursuing a resolution. Please consult the Softwood Lumber website at <a href="https://bac-lac.wayback.archive-it.org/web/20070221012438/http://www.dfait-maeci.gc.ca/eicb/softwood/">http://www.dfait-maeci.gc.ca/eicb/softwood/</a> for a chronology and further details on current litigation. </body> </html>

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Last Updated: 2006-10-30	Top of Page	Important Notices