Canada and the United States have agreed to extend their agreement on softwood lumber by two years.
Trade ministers from both countries made the announcement Monday at a ceremony in Washington, D.C., assuring some level of peace in what has been the most serious irritant in the generally good relationship between the two countries.
B.C. Lumber Trade Council president John Allan welcomed the news.
"The agreement does provide some stability and uncertainty in the marketplace," Allan said. "Nobody likes paying a border tax but it's the best of a bunch of bad
alternatives."
Cariboo-Prince George MLA Dick Harris said now is not the time to negotiate a new agreement with the forest industry still recovering.
"Giving another couple of years break from having to go into the negotiations will be good for the industry," Harris said.
The countries decided in December that an extension of the current seven-year agreement would be preferable to new negotiations, but they delayed the formal announcement until the two
ministers could meet.
With the extension, the deal will be in force until 2015.
Since the signing of the 2006 deal, the U.S. has won two judgments at the London Court of International Arbitration. A third complaint that B.C. is exaggerating the damage from mountain pine beetle to reduce stumpage fees is headed to oral arguments in
February.
The U.S. gets particularly confrontational whenever Canadian lumber makes up more than 30 per cent of the U.S. market, Allan said.
"When the agreement was signed it was around 34 per cent and it's slowly climbed down with the fall in U.S. housing demand," he said.
"There is no question the U.S. needs our wood and I think our market share will creep back up again but I'd be surprised if we [went] back up to that 34 per cent level and that's why it's all the more important that we diversify our markets and continue to
expand in Asia."
Since the U.S. housing crash that began in 2007, Canadian shipments of wood products south have tumbled from $19 billion in 2004 to $5 and $6 billion in 2009 and 2010 respectively. According to government data, lumber exports to the U.S. totalled $2.6 billion in the first 11 months of 2011, with B.C. accounting for 58 per cent of the total.
However, lumber exports to China rose 103 per cent in 2011 from the previous year, and now represent 23 per cent of total softwood shipments.
- with files from
The Canadian Press
