March 6, 2008 / 5:59 PM / in 10 years

U.S. senator wants more action on Canada lumber spat

WASHINGTON (Reuters) - U.S. Trade Representative Susan Schwab got a grilling on Thursday from a senior lawmaker who complained that Canada was continuing to flout terms of a deal to limit imports of softwood lumber.

Just this week, a private arbitration court issued a mixed ruling in a spat that erupted shortly after Ottawa and Washington signed an agreement in late 2006 designed to halt decades of lawsuits over lumber trade.

Many lumber producers in the United States see imports from their northern neighbor as an existential threat and one that has exacerbated troubles in today’s plummeting housing market.

“We have a long history here ... they’ve broken the agreement several times,” Senate Finance Committee chairman Max Baucus, a Democrat from timber state Montana, said during a hearing on the Bush administration’s 2008 trade agenda.

“What more can you do?” he demanded of Schwab.

Baucus was rankled by the ruling this week, which sided only partially with the United States’ contention that Canadian provinces weren’t properly abiding by measures, including quotas and export taxes, that aimed to limit surges of Canadian exports into the United States.

On Thursday, the Schwab defended the Bush’s administration efforts and told Baucus that the “single most important thing” the United States could do was ensure that Canada abided by the limits set up in the 2006 agreement.

The administration also expressed disappointment at the ruling this week, raising questions about whether or not it would take additional steps.

Trade officials have also filed a second complaint at the arbitration court over allegations some Canadian provinces are unfairly subsidizing their timber industries.

Reporting by Missy Ryan; Editing by Marguerita Choy

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