Softwood talks hit snag, say reports

Talks aimed at finalizing a softwood lumber agreement between Canada and the United States have hit a snag, according to reports.

Federal negotiators on Sunday twice postponed conference calls to discuss the final draft of the deal, said Canadian Press.

It's not clear why Ottawa missed its self-imposed Sunday night deadline to complete the final text of the 50-page document.

The conference calls are expected to take place on Monday.

http://www.cbc.ca/story/business/national/2006/06/12/softwood-lumber.html

that now that Stevie has his pants around his ankles and is all bent over George is set to drive the old avenger home.



Still knob-gobbling.

Sources say the two sides are deadlocked on several key issues, including treatment of the B.C. government's market-based timber pricing reforms and Quebec and Ontario concerns over the agreement's quota provisions.

Ontario Natural Resources Minister David Ramsey said his province supports the Canadian draft proposal but "it's the American one that's nickel and diming us to death."

Critics say the deal's current language will handcuff the industry. For instance, lumber remanufacturers, who export items such as flooring and window frames, worry the rules covering exports in their sector are so restrictive most won't qualify.

Besides the border tax, the agreement would give lumber-producing regions the option of accepting an export quota plus a small tax, an arrangement that concerns Quebec and Ontario because it might hamstring producers with a hard cap on exports determined monthly.

With some 55 per cent of lumber exports coming from B.C. forests, the province has the clout to kill the agreement.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1150149009415&call_pageid=968332188492

"SOURCE: Obscure Trade Settlement Could Create $480 Million Slush Fund for White House"

The United States lost virtually every major aspect of the litigation for the last five years, and as a result, a settlement seem elusive. Then, last April, the United States and Canada reached a surprise agreement. Here’s what we know about the deal from public sources:

– $4 billion dollars from the account will be returned to Canada. $1 billion will be returned to the United States. Of the $1 billion dollars that will remain in the United States, half is designated to the U.S. lumber industry.

– The remaining $500 million is to be split between “a joint initiative benefiting the North American lumber market” and “meritorious initiatives in the United States” such as “Katrina reconstruction.” (The New York Times reported that it is “not clear what will happen” with the money slated for this purpose.)

– The deal was struck after direct communication between President Bush and Prime Minister Stephen Harper, who are political allies and personal friends.

http://thinkprogress.org/2006/06/12/white-house-slush-fund/

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Steve-O isn't the one bending over, he is standing beside Dubya and bending over the Canadian lumber industry with a smile. He is ready to give up 20% to look like he finally 'solved' the dispute that 'the liberals never could'. This was bullshit from the beginning, this a little political quid pro quo for being a friendly voice in that pack of rabid socialists up North. If the disputed amount is 5 billion and you have won 90% of the legal challenges then you should get back 5 billion, not 4 billion with a half billion going to keep those rat bastards in office down there

Good going Pro-Business Conservatives, i'm sure the lumber industry will love absorbing the costs of your 'political victory' if this gets finalized.

To express their concerns over the draft documents they have seen, at least 80 Canadian lumber companies filed suits in a U.S. Court of International Trade case over the last two weeks. As no deal can be ratified unless all suits are withdrawn, companies say they are protecting their interests should Canada sign a deal they do not support.

Russ Cameron, who represents the $2.5-billion B.C. lumber remanufacturing sector, said virtually all his members who ship into the U.S. market are opposing the deal as it now stands and filed suits to give them leverage with Ottawa.

http://www.canada.com/topics/news/politics/story.html?id=50d15e27-d5e2-4568-b164-c4fbfdb8fc18&k=42121

their suits, the deal can't be ratified, I wasn't aware that that option was available to them. Good for them for forcing the issue. Harper must be frothing at the mouth in private that his photo-op with bush won't include his gift of Canada's one billion dollars plus our softwood lumber industry.

VANCOUVER — The U.S. Commerce Department has boosted punitive duties on Canadian softwood lumber almost four percentage points even as the two governments struggle towards finalizing an agreement to end the long-standing trade dispute.

The department's International Trade Administration says preliminary results of its third administrative review of anti-dumping and countervailing duty orders found provincial stumpage — Crown timber-cutting fees — and other policies last year continued to confer a benefit on Canadian producers, allowing them to export into the U.S. market at below normal values.

The preliminary finding raises the combined duties to 14.7 per cent from 10.8 per cent.

Successive reviews lowered the rate to just under 11 per cent, but Canadian companies have paid in more than $5-billion (U.S.), most of which they would get back under terms of the proposed agreement.

http://www.theglobeandmail.com/servlet/story/RTGAM.20060614.wsoftwood0614/BNStory/Front

Vancouver — Talks to settle the Canada-U.S. softwood lumber situation are threatened by stalemate over key issues, forcing negotiators to take a break until Friday and possibly longer, sources tell The Canadian Press.

Canadian negotiators have told lumber-producing provinces and the industry they'll hold a “taking-stock” meeting on Friday to decide whether it's worthwhile continuing talks next week.

The talks missed a key deadline last weekend to have an agreed legal text for the seven-year agreement that would replace punitive U.S. lumber import duties with a Canadian export tax or quota on shipments.

Sources say Ottawa is no longer in a hurry because it has missed its self-imposed deadline to introduce the export tax legislation before Parliament breaks for the summer next week.

http://www.theglobeandmail.com/servlet/story/RTGAM.20060614.wsofty0614/BNStory/Business/home

To heck with Ottawa's deadline. Get the heck up there in the front line and lay down the law!

NEW!!! Basic Terms of a Canada-United States Agreement on Softwood Lumber (details)

The following summarizes the basic terms upon which Canada and the United States will
draft a proposed Agreement resolving the softwood lumber dispute, including revocation
of orders, refund of deposits, imposition of an export measure in Canada and addressing
long term policy reform.
Canada and the United States (“the Parties”) agree to the following:
Orders and Deposits: The U.S. will revoke the CVD and AD orders on Canadian
softwood lumber imports and stop collecting deposits. We estimate that, at the time of
the signing of the Agreement, the U.S. will hold at least US $5 billion in deposits. The
U.S. will receive US $1 billion, and the remainder will be distributed to importers of
record. The amount going to the U.S. will be divided as follows: 50% to the members of
the Coalition for Fair Lumber Imports; a portion for a joint initiative benefiting the North
American lumber market; and, remainder to meritorious initiatives in the U.S. as
identified by the U.S. government in consultation with Canada. The Parties acknowledge
that this distribution of deposits does not constitute a precedent for distribution of duties
to any entity other than importers of record.
Scope: The agreement applies to the products covered under the AD and CVD orders.
The scope will change only on mutual consent, except that each party reserves the right to
claim a change in scope and have that claim addressed through dispute settlement.
Border Measures: The border measures include an export measure, a 3rd country
trigger, and a surge mechanism.
Export Measure: A region (the BC Interior, BC Coast and each of the provinces
east of BC) will choose between an export charge, with the charge varying on the
Random Lengths Framing Composite lumber price (“price”), or an export charge
plus volume restraint, where both the rate and volume restraint vary on the price,
as follows:
Price Option A –Export Charge
(%)
Option B – Export Charge plus
Volume Restraint*
Over US$355 0 0
US$336-355 5 2.5% + regional share of 34% of
U.S. Consumption
US$316-335 10 3% + regional share of 32% of
U.S. Consumption
US$315 or under 15 5% + regional share of 30% of
U.S. Consumption
April 27, 2006
2 of 3
* A region’s market share will be based on the region’s average share of
Canadian exports to the US during calendar years 2001 to 2005, inclusive,
applied to the indicated national Canadian market share of the U.S.
market.
The export charge will be levied on the same value on which duties are currently
levied.
3rd Country Trigger: If in any two consecutive quarters, the following three
conditions exist, Canada will refund any export charges paid in those quarters (up
to the equivalent of a 5% charge): the 3rd country share of US lumber
consumption increases by 20% over the same quarter in the previous year (in 2
consecutive quarters); Canadian market share is decreasing in the same two
quarters; and, US domestic producers’ market share is increasing in the same two
quarters. This provision will not apply to any region that has triggered the surge
mechanism.
Surge Mechanism: This mechanism is triggered if a region’s exports exceed
110% of its allocated share in any one period. If a region’s exports are between
the trigger volume and the trigger volume plus 1%, then the next period the
trigger volume is reduced by the overage. If a region exports more than the
trigger volume plus 1% in any one period, then the region will pay 150% of the
normal export charge for that period.
For the surge mechanism, a region’s market share will be based on the region’s
average share of Canadian exports to the US during calendar years 2004 and 2005
applied to a 34% national Canadian market share of the U.S. market.
Exceptions to the Export Charge: The export charge on products valued at more than
$US 500 mbf will be charged as if their value was no more than $US 500 mbf. Canada
will limit the export charge on remanufactured lumber products from companies
operating independently of tenure holders to the first mill price.
Exclusions: The border measure will not apply to exports of lumber products:
a) from logs harvested in the Atlantic Provinces, the origin of which is certified under the
Maritime Lumber Bureau Certificate of Origin.
b) from logs harvested and produced in the Yukon, Northwest Territories or Nunavut;
c) from at least 32 companies , including those excluded from the CVD order and those
who have received “no interest” letters in connection with their application for a changed
circumstances review.1
1 Companies excluded from the CVD order as a result of the company exclusion process -- 20. Companies
excluded from the CVD order as a result of the expedited review process -- 6. Companies eligible for
exclusion because they have received "no interest" letters in connection with their application for a changed
circumstances review -- 6. Two additional companies’ eligibility for exemption are to be determined.
April 27, 2006
3 of 3
Policy Exits: Canada, with full participation of the provinces, and the US will make best
efforts to define “policy exits” from the export measure for each province within 18
months of entry into force of this agreement.
Dispute Settlement: Disputes on the application or interpretation of the agreement, or
on the implementation of mutually agreed policy exits, will be resolved through a binding
dispute settlement process. The process will be neutral, transparent, expeditious and
well-defined. Panellists shall be non-North American commercial arbitrators.
Duration: The agreement will be for a term of 7 years, and may be renewed for 2 years.
Other Clauses: The Parties will agree to clauses with respect to the following issues:
a) litigation: the Parties will take steps to terminate all litigation by the entry into
force of the Agreement;
b) no new cases: the US will not self-initiate and US will dismiss any petition for
anti-dumping and countervailing duties on Canada softwood lumber, and will not
take any other trade action or initiate investigations with respect to Canadian
softwood lumber. Domestic producers accounting for more than 60 percent of US
production will provide irrevocable “no injury” letters stipulating “no injury”
during the life of the Agreement;
c) anti-circumvention:
a. Neither Party will take action to circumvent commitments set out in the
Agreement, or to offset the export measure.
b. If exports from the Atlantic Provinces to the US exceed 100% of softwood
lumber production in the Atlantic Provinces in any quarter, then exports to
the US from the Atlantic Provinces in the following quarter will be subject
to a penalty of $CAN 200 mbf on the excess.

http://www.for.gov.bc.ca/HET/Softwood/Term%20Sheet%20Apr%2027%202006.pdf