U.S.-Canada group to discuss lumber Softwood dispute among projected topics

WASHINGTON – There may be no quick resolution to the contentious dispute between the United States and Canada over softwood lumber, but a new group is about to take a look at the problem and scramble for solutions.

The Canada-United States Inter-Parliamentary Group is scheduled to examine the matter, one of a number of international issues on the agenda, when it meets in Niagara Falls, N.Y., May 15-18.

Sen. Michael Crapo, R-Idaho, and Rep. Amo Houghton, R-N.Y., will serve as co-chairmen of a U.S. delegation. The Canadian co-chairmen are Sen. Jerahmiel Grafstein and Member of Parliament Joe Comuzzi.

Crapo, who was named to the group by Senate Majority Leader Bill Frist, R-Tenn., won’t have any legal authority behind his actions, but the resolution of the members of this 48-member entity could go far in advising the leadership of both countries on how to proceed. The group was set up in 1969 to encourage the flow of information between the two countries.

“The softwood lumber concerns will be at the top of my priority list,” Crapo said. “I also expect we will discuss a number of other trading issues, such as those related to agricultural products like wheat and potatoes.”

The softwood lumber dispute goes back to whether Canadian exports to the United States are subsidized, primarily through low stumpage fees that Canadian provinces charge lumber companies to chop down trees on government-owned land.

To offset that subsidy, the U.S. government has imposed an international tariff. Canadians claim that the 27 percent tariff imposed in May 2002 has killed the Canadian lumber industry and raised new-home prices in the United States.

Unhappy with the way Canada is reacting, U.S. lawmakers from Western states are pressing the Bush administration to recalculate the tariff at an even higher rate, sparking new anger in several Canadian provinces.

In February, Commerce Secretary Donald L. Evans and Canadian Trade Minister Pierre Pettigrew shook hands and said they were committed to resolving the issue.

But that very same week, with a grant from the Canadian government, the U.S.-Canada Partnership for Growth, a coalition of Canadian lumber companies and U.S. homebuilders and developers, started airing advertisements on television stations in Washington warning that the tariffs on Canadian softwood lumber threaten U.S.-Canadian relations.

Crapo said he doesn’t believe that’s true and “the relationship between the U.S. and Canada is very positive and very strong.”

Crapo said he agrees with the position of the U.S. lumber industry that the Canadian government is subsidizing the timber marketed in the United States. He said the issue could be resolved once both countries agree to balance the playing field.

“Once the [Canadian and U.S.] lumber industry has a solid understanding of the rules by which our trade and lumber will be conducted and these subsidies end, we will have a balanced playing field that we have so often talked about,” Crapo said. “If we level that playing field, the unfair pressure on U.S. and Idaho mills will be eliminated.”

Canada and the United States are each other’s strongest trading partners in the world, Crapo said.

“In most contexts we don’t have conflicts and we are working together to achieve global objectives together,” he said.