Mar 30 2007

Shelby Announces Consultations with Canada on Softwood Lumber

U.S. Senator Richard Shelby (R-AL), Ranking Member of the Senate Appropriations Subcommittee on Commerce, Justice, and Science, today announced that the United States Trade Representative Susan Schwab has requested formal consultations with Canada to discuss compliance with the 2006 Softwood Lumber Agreement (SLA).

“Ambassador Schwab’s oversight is critical to the success of the Softwood Lumber Agreement,” said Senator Shelby.  “The lumber industry is a vital component of the Southern economy and thousands of jobs are at stake.  For decades the U.S. and Canada have been at odds on this issue and I have and will continue to fight for Alabama’s lumber jobs.”

Background:

  • The SLA was implemented to resolve a long-standing conflict between the U.S. and Canada over the effect of Canadian lumber exports on the U.S. market.
  • The SLA states that Canada must tax their exports when U.S. market prices drop below a certain level.
  • The United States is concerned about the impact of government benefits given to the Canadian forestry sector.
  • The United States is also concerned by adjustments the Canadian government has made to their own export levels based upon the differences between expected and actual U.S. market conditions.  This impacts the point at which additional taxes must be placed on the lumber.
  • The formal consultations are the first step in the SLA’s dispute resolution mechanism.  Under the agreement, consultations are to be held within 20 days.  If the dispute is not resolved within 40 days, the U.S. or Canada can refer the issue to arbitration.