Canada, U.S. reach soft-lumber deal Draft agreement may end months-long dispute over softwood imports

MONTREAL – Canadian and U.S. officials have reached a tentative deal to settle a long-running dispute over Canada’s softwood lumber industry, a Canadian official said Tuesday.

“We have found common ground on a possible agreement on the parameters,” Canadian trade ministry spokesman Sebastien Theberge told reporters. He declined to give any details.

Negotiators reached the agreement after talks in Washington last week, Theberge said. The two sides now are reporting back to ministers and to the lumber industries in the two countries before a final decision is made, he said.

“It isn’t the time, it’s the quality of the agreement that matters. It is important to take the time to analyze what we have as a draft,” Theberge said.

He said the agreement, if signed, would bring an end to litigation Canada has brought both with the World Trade Organization and under the North American Free Trade Agreement.

Theberge was speaking on the sidelines of a meeting of 25 WTO ministers to look at issues surrounding the current “round” of negotiations to reduce barriers to international trade. The ministers have gathered at the invitation of Canadian trade minister Pierre Pettigrew.

Last year, the United States imposed tariffs averaging 27 percent on softwood imports from four Canadian provinces, contending that government subsidies keep Canadian lumber prices artificially low and threaten the U.S. industry.

Softwood lumber from pine, spruce, fir and hemlock trees is used to frame houses. The United States imported nearly $6 billion of softwood lumber in 2001, about one-third of the American market.

Canada, which denies it subsidizes its lumber industry, says softwood exports to the United States fell sharply after the tariffs were imposed, forcing mills to lay off thousands of workers.