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Canada-U.S. Softwood Lumber Settlement Not Really a Settlement (Come on, Stop Looking So Surprised!)

March 30, 2009

Remember the Softwood Lumber Dispute that was settled back in 2006 by Canada’s New Government? The one that Michael Ignatieff is apparently “cool” to reopening?

Well, maybe re-opening is not the issue. American softwood producers apparently believe the thing was never properly implemented. Stories here. And a statement here.

This could be a very big headache for Canada-U.S. relations and Stephen Harper’s charm offensive with President Obama. It could also be a headache for Obama who tends to lean toward free trade pragmatism, but must content with a strongly protectionist Congress.

Of course, none of it is surprising. With the U.S. housing market collapse, lumber interests are going to be fighting for every nickel and dime they can. And Canada is an easy target. The disappointing thing is that Canadian governments are handing out ammunition to these U.S. lumber special interest groups. Their argument appears to be that Quebec and Ontario failed to implement the 2006 agreement by the set deadline. That footdragging– and then refusal to implement a decision by London Court of International Arbitration that made the finding that the implementation was late– has given American softwood lumber groups another justification to cry foul and impose tariffs.

On the other hand, if the 2006 settlement was, in truth, never actually implemented by the Ontario and Quebec Governments as the U.S. lumber groups claim– because the provincial governments did not think it fair, feasible, or implementable — then the settlement never really was a settlement. Just a prelude for more trade battles under a different heading. Here we go again.

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