Canada, U.S. extend softwood lumber agreement

Mon Jan 23, 2012 3:11pm EST
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By Doug Palmer and David Ljunggren

WASHINGTON/OTTAWA (Reuters) - Canada and the United States extended a bilateral softwood lumber deal by two years to 2015 on Monday, underlining the two nations' close trade ties despite recent disagreements over an oil pipeline.

"This extension agreement will bring much-needed stability and predictability to the lumber industry," Canadian Trade Minister Ed Fast told reporters after a meeting in Washington with U.S. Trade Representative Ron Kirk.

Washington and Ottawa signed the initial seven-year deal in 2006 in a bid to end prolonged legal fights. Producers in the United States have complained for decades that Canada unfairly subsidizes its lumber companies.

In recent years, the U.S. housing downturn and the lingering effects of the global financial crisis have created hard times for North American lumber producers.

Kirk, in a separate statement, said continuing the pact was important, "particularly when both sides of the border are facing weak demand."

The extension was signed less than a week after President Barack Obama's administration irritated Canada by vetoing a proposed pipeline that would have carried crude from Alberta's oil sands to the U.S. Gulf Coast.

Fast declined to tell reporters whether he discussed the issue with Kirk but said he was optimistic the deal would eventually be approved.

At the same time, it is important Canada "diversify its markets" for both its oil and lumber, Fast said.   Continued...

<p>U.S. Trade Representative Ron Kirk looks on before the opening of the 8th World Trade Organization Ministerial Conference in Geneva December 15, 2011. REUTERS/Denis Balibouse</p>