US-Canada lumber talks fail
( 2002-03-22 15:49) (7)
US-Canadian lumber trade negotiations ended in failure late on Thursday, with Canadian Trade Minister Pierre Pettigrew saying his country would challenge US duties against softwood lumber before international tribunals.
Trade negotiators from the two countries had faced a self-imposed midnight Thursday deadline to settle the $6 billion lumber dispute.
The United States accuses Canada of violating trade rules by dumping more than $6 billion worth of subsidized softwood lumber here. Canada counters that the United States simply is trying to protect a less-efficient domestic lumber industry.
Last year, the United States set preliminary duties averaging 32 percent against Canadian softwood lumber. The Commerce Department is set to finalize the duties on Friday.
Duties against Canadian lumber would mark the second time this month that the Bush administration has moved to protect a US industry from competition. On March 5, the United States set import duties of up to 30 percent on some foreign steel.
And just like on steel, US consuming industries -- in this case wood users such as home builders and lumber retailers -- are complaining that the duties will increase their costs, which will be passed on to consumers.
WTO, NAFTA CASES PLANNED
The collapse of the talks, despite urgings by both countries' leaders to reach a deal, prompted Pettigrew to step up his attacks against the US lumber industry.
Accusing the US industry of being "blatantly unreasonable," Pettigrew told reporters that Canada was now resigned to being slapped with final countervailing and anti-dumping duties by the Commerce Department.
The US industry argued that Canada had failed to address long-term reforms to make that country's lumber industry more market-oriented. Canada's shipments of softwood lumber, which is used in home-building and remodeling, account for about one-third of the US market.
US home builders argue duties could add more than $1,000 to the price of a new home.
"They will announce it (the duties) tomorrow, unfortunately," Pettigrew said after the talks ended. "That determination I will challenge before the WTO and before the NAFTA (North American Free Trade Agreement). We are going to fight them and we are going to win."
But Pettigrew also left open the possibility of negotiations that could resume on a separate track from any cases before the World Trade Organization and NAFTA panels after letting "the dust settle a little bit."
In contrast to his criticism of the US lumber industry, Pettigrew praised the Bush administration and said it "negotiated in good faith" and "constructively."
But Canadian industry sources portrayed the talks somewhat differently.
One source told Reuters that the Canadian government angrily rejected a last-minute US proposal for a 19.3 percent export tax on lumber shipments over five years and a continuation of the US anti-dumping case against Canada.
Pettigrew declined to provide details of the rejected US offer, saying he would talk about it on Friday in Ottawa.
The proposed US export tax would have been equal to a preliminary countervailing duty set by the US Commerce Department last year. And it would have fallen far short of a long-term deal designed to reform timber-harvesting practices on Canadian provinces.
'AN EXTREMELY COMPLICATED ISSUE'
Earlier on Thursday, a senior US trade official told reporters, "Both sides are working very constructively but it is an extremely complicated issue." The official said negotiations would continue even if the duties were announced.
Before the talks broke up, Deborah Regan of the Coalition for Fair Lumber Imports said the two sides were "still far apart" on substantive issues. The coalition represents US sawmills, which launched the trade case against Canada.
By mid-morning on Thursday, a lead US negotiator, Commerce Undersecretary Grant Aldonas, left the talks and boarded an airplane for California, where he was scheduled to address a Los Angeles African-American business group.
The Commerce Department action on Friday means Canadian firms could be forced to start making cash deposits to the United States by the end of May, reflecting the new duties.
Canada was said to favor an export tax of no more than 10 percent while Washington in recent days had called for up to 37 percent. US officials said Canada offered to auction 13 percent of its timber at market rates, far below the 65 percent sought by the US industry.
|
