By Katie Davis I n a time when U.S. candidates for President are talking about making America great again and making the best possible deal where America wins, we have negotiations going on between Canada and the U.S. over softwood lumber. Back in June, Prime Minister, Justin Trudeau and outgoing America President, Barack Obama encour- aged their government negotiators to chop out a deal when both sides were meeting in Ottawa to meet over the Softwood lumber industry, which has been a pain point in Canada - U.S. trade relations for a long time. The two countries came away from those meetings in Ottawa acknowl- edging that “significant differences” still in what could soon be a trade war between the U.S. and Canada over softwood lumber. Industry expects see the issue is escalating, raising the concern north of the boarder of higher tariffs as officials downplay
the likelihood of reaching a deal before an October deadline.
In a statement made by Canada’s Ambassador to the U.S., David MacNaugh- ton, and Canada’s chief softwood lumber negotiator, Martin Moen, both sides remain far apart. Trade Minister, Chrystia Freeland confirming the same and stated in a recent interview that Canada would rather go past the October deadline than settle for a bad deal saying, “We’re not going to be bound by any particular deadline.... We’re going to try and reach an agreement.” So what happens if Canada and the U.S. do not reach an agreement and the deadline passes? Well considering that since the previous softwood lumber deal expired in October of last year, it activated a negotiation period where export quotas for Canadian producers were lifted and tariffs were locked for a period of one year. Since this negotiation period commenced, monthly softwood exports to the U.S. from Canada are up 23 percent on average. So industry experts expect the U.S. to begin a process to enact new tariffs. This would be a barrier to Canadian producers of softwood lumber and reduce softwood lumber going into the U.S. as the value of these exports to the U.S. is up 25 percent to $3.6 billion in the first six months of 2016, compared to $2.9 billion for the same period last year. Any new U.S. tariffs imposed on Canadian softwood lumber would not imme- diately take effect, this action from the U.S. would be somewhat of a second deadline for trade negotiators, raising the prospect of a deal after the grace period ends, but before the tariffs are expected to actually kick in sometime during spring of 2017.
51
SEPTEMBER 2016 • SPOTLIGHT ON BUSINESS
Made with FlippingBook - Online magazine maker