U.S. lumber industry expected to heat up ongoing softwood lumber dispute

The Tembec softwood lumber plant operates in Senneterre Que., on Thursday Nov 13, 2008. (THE CANADIAN PRESS/Jacques Boissinot)

OTTAWA -- A spokesman for International Trade Minister Chrystia Freeland says the U.S. Lumber Coalition is expected to submit petitions to the Department of Commerce on Friday, requesting an investigation in the ongoing softwood lumber dispute.

Softwood lumber is excluded from the continental trade agreement and lumber producers in both countries continually bicker over whether Canadian companies' cheap access to public forests constitutes an illegal subsidy.

Freeland's press secretary, Alex Lawrence, says Canada is prepared for any situation, and the government will "vigorously defend" the interests of Canadian workers and producers.

At the APEC summit in Peru last weekend, Prime Minister Justin Trudeau discussed the dispute with U.S. President Barack Obama and Freeland met with U.S. trade representative Michael Froman.

The U.S. industry must sign on to any softwood lumber agreement, as it must agree to suspend its legal rights to petition for trade remedy relief for the duration of the agreement.

Canada's share of the U.S. market has oscillated between 26 per cent and 35 per cent since 2000 and was estimated at 31 per cent earlier this year.

"Our softwood lumber producers and workers have never been found in the wrong," Lawrence said in an email Thursday. "International bodies have always sided with our industry in the past."

At the same time, he notes the protectionist climate in the U.S. complicates any trade negotiation, including this one.

The 2006 softwood lumber agreement expired a year ago but a one-year standstill period kicked in to allow an attempt at resolution. It imposed export taxes of zero to 15 per cent on Canadian lumber, growing with market prices and export volumes.

The U.S. Lumber Coalition now wants across-the-board quotas -- which is rejected by Western Canadian producers.