UPDATE 2-Canada says deadlocked with U.S. over lumber, ready to litigate

Wed Sep 14, 2016 7:27pm EDT
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(Adds U.S. trade official comment)

By David Ljunggren

OTTAWA, Sept 14 (Reuters) - Canada has not yet managed to settle a long-running dispute with the United States over softwood lumber exports and is ready to resort to litigation if necessary, Trade Minister Chrystia Freeland said on Wednesday.

Freeland, speaking to reporters after talks with U.S. Trade Representative Michael Froman and industry representatives in Washington, said increasingly protectionist trade sentiment in the United States was making the talks more complex.

"This is a notoriously, historically tough and complicated issue to resolve. There are still some fundamental areas of differing points of view between Canada and the United States," Freeland said.

U.S. producers complain that Canadian lumber is subsidized, and have in the past launched trade challenges that resulted in the United States imposing billions of dollars in tariffs.

The most recent round of arguments ended with a 2006 deal that expired in October 2015. Both sides agreed to take no action for a year after that, but without a new treaty, U.S. firms have made clear they will file new damage claims.

"If we don't reach a deal by (next month), negotiations very much can continue ... we are looking for a good deal but we are not looking for any deal," said Freeland, stressing that both sides were talking in good faith.

"We would prefer peace but if we have to fight, we'll fight, and we are absolutely preparing to litigate if that's the direction in which this issue goes. Canada has a very good record of winning cases at all levels on this issue," she added.   Continued...