Oregon senator accuses Canada of 'politicizing' lumber duties probe

WASHINGTON (Reuters) - U.S. Democratic Senator Ron Wyden on Friday accused Canada of “politicizing” a U.S. government anti-subsidy investigation into Canadian softwood lumber imports by threatening retaliation against wine and other products from his home state of Oregon.

Senator Ron Wyden (D-OR) speaks with Reuters during an interview in Washington, U.S., May 19, 2017. REUTERS/Joshua Roberts

Wyden told Reuters in an interview the trade case has broad support in Congress and is supported by evidence, adding that Canada’s reaction is unfair.

“They tried to politicize it when they said we’re thinking about retaliating against Ron Wyden because he has been one of the ringleaders of this,” Wyden told Reuters. “I want it understood that what we’re talking about is supported by 25 senators from both political parties on the merits.”

Canadian Prime Minister Justin Trudeau has said his government will defend the timber industry against what he calls an unfair U.S. decision last month to impose tariffs on exports of softwood lumber.

Canadian Foreign Minister Chrystia Freeland’s office did not immediately respond to a request for comment on Wyden’s remarks.

The long-running dispute centers on U.S. lumber producers’ charges that Canadian competitors benefit from an unfair government subsidy because their timber is cut from government-owned land at low costs.

The Commerce Department in April imposed preliminary duties averaging about 20 percent to offset this. Final duties are expected to be determined later this year, with the case subject to a final vote by the U.S. International Trade Commission.

Trudeau responded by saying his government would study whether to stop U.S. firms from shipping thermal coal via ports in British Columbia. The Canadian government also was reported to be considering duties on Oregon exports including wine, hardwood flooring and plywood.

Wyden said Canada was providing “truly abusive kinds of subsidies” that made it hard for Oregon lumber mills to stay in business.

Wyden said the Trump administration’s letter to Congress on Thursday to launch renegotiations of the North American Free Trade Agreement was “disappointingly vague,” but he believed that Trump’s new trade negotiator will pursue broad-based changes to the 23-year-old pact with Canada and Mexico.

Wyden said U.S. Trade Representative Robert Lighthizer told him that he will pursue changes in areas such as labor rights, environmental rules, digital trade and getting rid of a problematic dispute settlement process.

“He made it clear to me that he was committed to a significantly broader agenda than that written statement,” Wyden said.

Lighthizer’s NAFTA notification set the clock ticking toward a mid-August start for renegotiations.

The letter (here) was far less detailed than a draft sent to lawmakers in March, which listed as objectives tighter rules of origin, tax equality and the ability to reimpose tariffs if Mexican and Canadian imports pose a serious injury threat to U.S. industry.

Reporting by David Lawder; Editing by Chris Reese