Ontario wants free access to U.S. softwood lumber markets

Archived Release

Ontario wants free access to U.S. softwood lumber markets

TORONTO, Dec. 13 /CNW/ - Ontario remains in favour of unrestricted market access to U.S. softwood lumber markets, Ontario Economic Development and Trade Minister Bob Runciman today outlined in a meeting with British Columbia Minister of Forests Michael de Jong.
The meeting took place in the context of the Canada-U.S. softwood lumber dispute. Following a productive meeting, the two ministers concurred that in seeking any new arrangements with the U.S. on softwood lumber, their shared end goal is unlimited access to the American market.
"Our province has consistently demanded free trade and has encouraged the federal government to litigate vigorously along with Ontario," said Runciman. "If the U.S. remains unwilling to provide a meaningful offer at the current talks, the negotiations are unlikely to achieve unrestricted trade in lumber."
The five-year agreement governing softwood trade between the United States and Canada expired on March 31, 2001. The Canadian Federal government entered into the Softwood Lumber Agreement with the U.S. in 1996 over the vigorous objections of Ontario, which was concerned about the agreement's negative impact on our industry.
Some lumber producers in the U. S. allege that the provincial and federal governments subsidize Canada's softwood lumber industry, which results in injury to U.S. softwood lumber producers. These allegations revolve around stumpage fees, which are prices that Canadian provinces charge companies for removing trees from public land. U.S. companies assert that stumpage fees are too low, thereby giving Canadian sawmills an unfair advantage over their U.S. counterparts. A countervailing duty investigation (CVD) would determine if Canadian lumber is unfairly subsidized. An antidumping (AD) investigation would determine if Canadian firms are pricing their U.S. bound lumber below their cost of production or prices in Canada.
Ontario's overall position continues to be that the North American Free Trade Agreement (NAFTA) was negotiated to provide access to the U.S. market. The Ontario government will continue to use all legal tools available to ensure that all Ontario exporters have access to the American market.
"Ontario's forest management system does not need fixing," said Minister of Natural Resources John Snobelen. "We price our timber fairly and our current discussions with the U.S. are about making that point clear to our American trading partners."
"Our experience with previous lumber deals is that they have failed to provide meaningful access to the U.S. market and they impose excessive costs on the industry," said Ontario Forest Industry Association President Tim Millard. "If the Ontario forest industry is not able to secure permanent, unrestricted access to the U.S. market through negotiations, it demands the right to see its interests vigorously pursued through litigation under the terms of NAFTA."
In the coming weeks, U.S. Envoy Marc Racicot is expected to report to President George W. Bush on the possibility of an agreement. Should no deal be reached by March 2002, the current trade cases would continue and a decision on final duties would be reached in May 2002.

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