A few hours from the expiry of the Canada-US agreement on softwood lumber, Ottawa and Washington were heading straight towards a new trade war.
The two governments were nonetheless determined to continue negotiations “despite the expiry of the moratorium,” according to a joint statement issued Wednesday by Global Affairs Canada.
Canada and the United States is “determined to continue negotiations to reach a lasting and equitable solution,” assured the Canadian Minister of International Trade, Chrystia Freeland and his US counterpart Michael Froman.
Justin Trudeau’s government has been saying for weeks that the goal for Canada, is to get a good agreement, and not just any.
protectionist climate in the US
But the protectionist rhetoric that are conveyed these days by the two candidates for the US presidency make an already difficult task even more complex, often noted the Minister Freeland in recent weeks.
“The protectionist climate our American neighbors complicates any trade negotiations including this one,” and therefore, “at present, the US industry is not at the rendezvous,” said Alex Lawrence Wednesday, the press secretary of the minister.
The agreement on softwood lumber was due to expire on Wednesday at 23:59.
According to the Ministry of International Trade, the expiry of the agreement does not mean an instant imposition of penalties – this does not occur for several months, does one said.
And if the rights eventually be imposed, Canada would be ready to defend himself in court. “Through their decisions, international bodies have always agreed with our forestry producers and workers,” said Alex Lawrence Wednesday in an email.
Following the expiration of the previous agreement, in 1996, the US Commerce Department imposed a 32% duty on Canadian lumber, which was then reduced to about 27% in 2002.
He remained at that level until the conclusion of a new agreement in 2006.
The little surprised industry
The confirmation of this new lock, a decade later, not surprising when the president and CEO of the Council of Quebec Forest Industry (CIFQ), André Tremblay.
And if the situation is particularly full-bodied this time, it is because the American forest industry balance of power is amplified by the “protectionist wind” that blows south of the border, he said.
“They want to seek significant concessions from the Canadian industry, he summarized in a telephone interview. They have the upper hand, and they use it. ”
American lobby timber
The US lobby lumber confirmed on Wednesday its intention to initiate proceedings that could lead to the imposition of countervailing duties.
The US Coalition Wood warned that such measures were necessary against the “unfair imports” of softwood lumber from Canada.
CIFQ’s lawyers expect the imposition of a tax “of 20 to 25% as of March 2017”, said André Tremblay.
This would be unsustainable for the Canadian forest industry – and Ottawa will fly to his rescue to prevent mill closures.
“It is estimated that in Quebec alone is about $ 250 million on an annual basis that such taxes could then represent,” stated André Tremblay.
This “failure” of the Liberal government to reach an agreement with its US partner could jeopardize 22,000 jobs in the country, according to the New Democratic Party.
The NDP MP Tracey Ramsey urged the Liberals to unveil the measures it plans to take to support Canadian industry.
For their part, the Conservatives argued that “the negotiation of a new agreement on softwood lumber has never been a priority for this government.”
“To say that it was a difficult agreement to be negotiated is a poor excuse to offer families who will lose their livelihood,” said in a statement the MP Randy Hoback.
The Liberals refuse to blame, and returned to sender. “The previous government left expire the agreement on softwood lumber without having begun negotiations to renew it” regretted M me Freeland in a statement.
Canadian and US officials continue to meet in Washington this week, said World Affairs Canada.