‘Riskier than doing nothing’:\u00a0Softwood lumber\u00a0package may hurt, not help Canada’s case<\/a><\/strong><\/p>\n<\/li>\n<\/ul>\n Late in 2016, the U.S. Commerce Department initiated two separate investigations\u00a0following a complaint from the U.S. lumber industry.<\/p>\n The first focused on whether lumber production in Canada\u00a0is\u00a0unfairly subsidized by\u00a0government. It resulted in countervailing duties of up to 24 per cent<\/a>,\u00a0depending on where the two-by-fours come\u00a0from.<\/p>\n The findings\u00a0of the\u00a0anti-dumping investigation will be\u00a0based on the\u00a0prices charged for that lumber in the U.S. If it concludes\u00a0lumber has flooded\u00a0in\u00a0at discount rates, duties are the remedy that\u00a0levels the playing field for American producers.<\/p>\n Analysts expect anti-dumping duties between ten and 12 per cent. Both duties will be added to shipments from Canada for the rest of the key summer construction season.\u00a0<\/p>\n Late in 2017, a\u00a0final determination by the Commerce Department will set a combined duty rate for Canadian lumber, in effect for\u00a0five years or more. It’s not rare for the final\u00a0figure to differ\u00a0from the preliminary duties.<\/p>\n Canada is\u00a0expected to\u00a0appeal to both the World Trade Organization (WTO) and a North American Free Trade Agreement arbitration panel, likely after the final duties are known in early 2018.<\/p>\n Canada’s lumber industry enjoyed a rare stretch of tariff-free trade with the U.S. in 2016, after the previous softwood lumber agreement expired. Its U.S. market share rose to 32 per cent, but has dropped\u00a0to about 27 per cent after the new duties.<\/p>\n Three-quarters of Canada’s exports go to the U.S., although the federal government is aggressively pursuing alternative markets, particularly in Asia<\/a>.<\/p>\n<\/p>\n Minister Champagne toured Tokyo Lumber Terminal Log Road Daikanyama \u2013 showcasing Canada\u2019s high-quality wood here in #Japan<\/a>. pic.twitter.com\/t7QRgC3Fge<\/a><\/p>\n \u2014 Figures cited this week by the Montreal Economic\u00a0Institute, a think tank that promotes free market solutions,\u00a0said that between January and May of 2017, the price of lumber in the U.S. rose by 17 per cent. Construction for a single-family home is\u00a0$2,400 US more expensive.<\/p>\n “It is still too soon to evaluate these effects over the long term since there is much uncertainty in the market, with each player pursuing its own strategy,” said MEI analyst Alexandre Moreau\u00a0in a release. “For the moment, the weakness of the Canadian dollar, the strong demand on the American side and high prices are allowing Canadian producers to partially absorb the effects fo the tariffs.”<\/p>\n Canadian lumber producers have laid off some employees.\u00a0But it’s unclear whether\u00a0Canadian production was just returning to previous levels after its brief\u00a0tariff-free boom.<\/p>\n Todgham\u00a0Cherniak, the trade lawyer,\u00a0said the U.S. industry is banking on both duties inflicting real pain. The April finding\u00a0of “critical circumstances,” which allowed\u00a0duties to be applied retroactively, was meant to add to the cost of not settling yet, she said.<\/p>\n What does the U.S. government want? “It’s hard for anybody to get their head around the dynamics of this administration,” Todgham Cherniak says.<\/p>\n U.S. Commerce Secretary Wilbur Ross said he would like softwood lumber to be dealt with before NAFTA renegotiations begin later this summer<\/a>.<\/p>\n But Canadian negotiators have seen little evidence of serious negotiation to date from the Americans, with\u00a0Foreign Affairs Minister Chrystia Freeland\u00a0confirming last week\u00a0the two sides remain far apart.<\/p>\n From left, Foreign Affairs Minister Chrystia Freeland, Natural Resources Minister Jim Carr and International Trade Minister Francois-Philippe Champagne announced $867 million in financial support on June 1 to help Canada’s lumber industry in the face of new U.S. duties. (Adrian Wyld\/Canadian Press)<\/p>\n “I think you’ll see negotiations start in earnest on softwood throughout the rest of the summer,” said trade lawyer Dan Ujczo. But he sees only\u00a0a 50-50 chance of a deal at this point.<\/p>\n Part of the problem? A hypocritical argument Canada’s making on the effect of lumber tariffs on homebuilding costs.<\/p>\n Ujczo\u00a0will\u00a0testify\u00a0at\u00a0NAFTA consultations in Washington next week on behalf of several clients, including the\u00a0Western Canada Alliance of Wall and Ceiling Contractors, which wants Canada to drop its drywall duties.<\/p>\nDemand still strong<\/h2>\n
\n
\n @CanadaTrade<\/a>\n<\/p><\/blockquote>\nCanadian hypocrisy?<\/h2>\n
![\"Softwood](\"https:\/\/i.cbc.ca\/1.4172586.1498101490!\/cpImage\/httpImage\/image.jpg_gen\/derivatives\/original_620\/softwood-lumber-carr-20170601.jpg\")
<\/p>\n
![\"APTOPIX](\"https:\/\/i.cbc.ca\/1.4089087.1493325395!\/cpImage\/httpImage\/image.jpg_gen\/derivatives\/original_620\/aptopix-trump-us-canada.jpg\")
<\/p>\n