Canada, U.S. Agree to Settle Lumber Spat, Lumber Officials Say

[charrison]

linkage

Dec. 6 (Bloomberg) -- Canada and the U.S. reached a tentative agreement to end a trade dispute over Canadian lumber exports that initially would limit producers such as Canfor Corp. and Abitibi-Consolidated Inc. to 31.5 percent of the U.S. market, or about 17 billion board feet, lumber executives said.

The quota would last for three years, Canadian lumber executives said. The proposal then offers Canadian provinces a chance at duty-free access without the threat of sanctions for the first time in two decades, provided they change their forest policies.

News of a potential settlement bolstered Canadian lumber stocks this week, as investors bet officials meeting in Washington were close to negotiating an end to U.S. duties of 27 percent on Canadian shipments of pine, spruce and fir boards. The U.S. government and industry have endorsed the proposal, while Canadian leaders will review it early next week, lumber executives said.

``I strongly support this deal,'' James Shepherd, who will run Canada's biggest lumber company if shareholders of his Slocan Forest Products Ltd. approve the company's purchase by Canfor Corp., said in interview from Vancouver. ``This will bring stability to the industry.''

 

[XMan]

Isn't Canada's lumber industry strongly subsidized by the government?

 

[charrison]

Originally posted by: X-Man
Isn't Canada's lumber industry strongly subsidized by the government?

US lumber companies claims it is, since the govermenr owns the timberland. This deal would bring the leasing of canadian timber out of the backrooms where deals are made.

 

[sandorski]

Originally posted by: X-Man
Isn't Canada's lumber industry strongly subsidized by the government?

The charge has been made numerous times. In the summer a NAFTA panel ruled that certain aspects of the Canadian system were in violation of Trade rules, but they were not as bad as the charges alleged.

 

[Ldir]

Originally posted by: charrison

Originally posted by: X-Man
Isn't Canada's lumber industry strongly subsidized by the government?

US lumber companies claims it is, since the govermenr owns the timberland. This deal would bring the leasing of canadian timber out of the backrooms where deals are made.

How is that different from the US? That is one of the complaints about our timber industry. They do not pay the full value of the trees cut or of repairing the damage they do to national forests.