January 20, 2008 / 1:26 AM / 10 years ago

U.S. presents new complaint on Canada timber support

2 Min Read

<p>Minister of International Trade David Emerson (L) listens as United States Trade Representative Ambassador Susan C. Schwab answers questions during the closing press conference of the NAFTA Free Trade Commission meeting in Vancouver, British Columbia, August 14, 2007. Washington has asked a private court to look into programs it says prop up Canada's timber industry in its second complaint that Ottawa is violating a 2006 deal to end years of lumber lawsuits.Lyle Stafford</p>

WASHINGTON (Reuters) - Washington has asked a private court to look into programs it says prop up Canada's timber industry, in its second complaint that Ottawa is violating a 2006 deal to end years of lumber lawsuits.

"Canada has violated the (2006 Softwood Lumber) Agreement because its provincial governments in Quebec and Ontario have implemented certain benefit programs," including loans, grants, tax credits and other programs that are said to benefit lumber producers, a U.S. Justice Department document stated.

Officials from Ottawa and Washington signed the deal in the fall of 2006 after years of lawsuits spurred by complaints from U.S. timber interests about their Canadian competitors.

But just months after it took effect, the deal started showing signs of fraying.

A private arbitration court in London already is looking into Washington's allegation that Canada has not abided by measures to limit export surges under the deal.

A decision on that first arbitration issue is expected by the end of February.

The two countries had been talking about Washington's complaints since last spring, to no avail.

"Efforts to resolve matters through consultations have not been successful," Gretchen Hamel, a spokeswoman for Schwab, said in a statement.

Just this week, U.S. Trade Representative Susan Schwab sent Canadian Trade Minister David Emerson a letter pressing his government to ensure that a new plan to help Canada's slumping timber industry and other workers does not endanger the two countries' shaky truce.

She said USTR was also looking into new assistance programs in Canada, but did not say which programs were of concern.

Prime Minister Stephen Harper says that his new economic assistance plan will respect the terms of the lumber deal.

"Canada is a committed partner in the Softwood Lumber Agreement and we will continue to work with the United States to ensure the on-going smooth administration of the Agreement," Emerson said in a statement on Thursday.

Reporting by Randall Mikkelsen and Missy Ryan; Editing by David Gregorio

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