Softwood 'biggest trade dispute in the world': end is near for U.S. trade battle, says OFIA.

• Author: Louiseize, Kelly
• Position: FORESTRY

Canada's softwood producers are near the end of the precedent-setting trade fight, Ontario Forest Industries Association (OFIA) president Jamie Lim says.

"This is not just a softwood lumber fight, this is the biggest trade dispute going on in the world right now," says Lim.

The United States Coalition for Fair Lumber Imports, comprised of powerful, well-organized American industry officials and the Department of Commerce (DOC) will have exhausted their avenues under the North American Free Trade Agreement (NAFTA) in trying to avoid paying back $4 billion in duty refunds, says Lim.

Canadian softwood lumber organizations are not letting up.

"If we don't get the duty refunds back, why would any manufacturer in Canada want to do business with the United States?"

Canada will never protect its interests, at least as far as the United States is concerned, without strong institutional laws and rules, according to Elliot Feldman and Carl Grenier, authors of A Broader View of Canada-U.S. Relations and the Battle Over Softwood Lumber. Institutionalized partnerships like the Free Trade Agreement (FTA) and NAFTA have brought a certain degree of partnership. However, when it comes to being America's confidante, rarely have there been concrete benefits.

"In the quest since 1971 to restore the privileged space, Canada often has accepted the role of mistress without marriage, and the United States has been able to avoid the threatened price of divorce," the authors state.

Therefore, Canada must enforce rules and laws already negotiated in the NAFTA and FTA. These aren't new rules or agreements, just the deal in to which they already entered, says Grenier, who is also executive vice-president of the Free Trade Lumber Council. Based on the NAFTA dispute process "(The American bodies) clearly see that they are losing the case and little by little we are (pushing them)," he says.

Reluctantly, they are conceding.

The Extraordinary Challenge Committee (ECC) heard final arguments from both Canadian and American industry counsel in early June and are expected to render a decision by late summer. It is supposed to be the body that will end the continuous cycle of disputes. But if this fails to satisfy the American counterpart, then Track II will be instituted. This would provide Canadian industry with protection from trade sanctions for a minimum of five years, the Canadian Industry Softwood Lumber Negotiating Position states. It then becomes a political issue...