U.S., Canada Establish Group on Lumber Dispute

The United States and Canada agreed to establish a working group to try to resolve a decades-old dispute between the two countries over softwood lumber trade, a U.S. official said Thursday.

The decision to set up the group came out of daylong meetings in Washington on Thursday, said a spokesman for the U.S. trade representative.

The spokesman said the two governments would meet again in September. He had no details on the composition of the group or how long its work might take.

This month, the Commerce Department announced it was setting preliminary import duties of 19.3% on Canadian softwood lumber.

The action was taken after the Commerce Department determined Canada’s provincial governments were unfairly subsidizing their lumber industries.

Canada has vigorously denied the charge and has threatened to challenge the U.S. duty at the World Trade Organization.

On March 30, a bilateral deal expired that limited Canada’s duty-free softwood lumber shipments to the United States to 14.7 billion board feet a year. U.S. industry promptly asked the Bush administration to impose heavy punitive duties on Canadian lumber.

The expired agreement came after several years of litigation between the two trading partners over lumber shipments. Canada’s exports have accounted for about one-third of the U.S. lumber market.

In an attempt to minimize long and costly litigation, U.S. and Canadian trade officials held a preliminary meeting in Ottawa last month and a second meeting Thursday.

As those talks proceeded, about 300 unionized workers rallied outside the U.S. Consulate in Vancouver, Canada, against what they said would be thousands of lost jobs in the Canadian forest industry if the tariffs were not removed.