Canada to press U.S. on lumber dispute

VANCOUVER, British Columbia – Prime Minister Paul Martin will be talking to President Bush soon on the U.S. decision to ignore a key NAFTA ruling on softwood lumber, International Trade Minister Jim Peterson said Monday.

“I don’t know whether they’ve talked yet or not,” Peterson said during a daylong stop in Vancouver. “As of yesterday they hadn’t but I understand it may take place sooner rather than later.”

Negotiations to settle the long-standing softwood lumber trade battle were supposed to resume in Ottawa on Monday.

But Peterson postponed talks indefinitely last week after the United States said it would not comply with a decision by an extraordinary challenge committee upholding previous NAFTA rulings that found Canadian lumber exports posed no threat of injury to American producers.

Canada contends that ruling removed the last justification for punishing U.S. tariffs on Canadian lumber. The U.S. government argued the panel’s unanimous ruling was moot because of a U.S. decision last fall to comply with an earlier World Trade Organization ruling on threat of injury – a position the Canadians consider a legal fig leaf for U.S. noncompliance.

Peterson warned the U.S. stance risks undermining the NAFTA entirely if the Americans are seen to ignore binding rulings that don’t suit them.

“The feedback from the United States is that they were very disappointed we called off the talks,” Peterson said between meetings with British Columbia business leaders.

Canada still wants a “long-term, durable solution” to the decades-old trade battle, said Peterson, but “right now our priority is to make sure the terms of the NAFTA are respected.”

U.S. Customs has collected $4.1 billion in duties since May 2002, when American trade officials concluded Canadian softwood imports were subsidized.