Canada and the United States formally signed the softwood lumber agreement Tuesday, one of the final steps before it goes into effect.
U.S. Trade Representative Susan Schwab and Canadian International Trade Minister David Emerson signed the agreement in a ceremony in Ottawa. It still must pass through Canada's Parliament next week before becoming law.
Schwab said the Bush administration is happy the divisive issue has been resolved. The decades-long dispute once fueled talk of an outright trade war between the world's largest trading partners.
"The United States government is fully committed to this endeavor, we look forward to lumber peace for at least seven to nine years, ideally longer than that," Schwab said.
An opposition party in Canada said last week it will support the agreement, guaranteeing that Canada's Conservative government will survive a crucial vote in Parliament on the issue.
Prime Minister Stephen Harper had described the vote on theCanadian-U.S. softwood deal as a confidence motion that could potentially bring down his government when the House of Commons resumes sitting Sept. 18.
But the Bloc Quebecois said last Thursday it will support the deal. Together, the Tories and the Bloc would have enough votes to defeat the Liberals and the NDP, who have said they will vote against the bill to implement the deal.
The agreement, which would see the Americans pay back about $4 billion of$5 billion in punitive duties paid by Canadian lumber producers, has been endorsed by the premiers of Quebec, British Columbia and Ontario, the three big softwood-producing provinces.
The seven-year, renewable deal was announced in April after years of on-and-off bargaining and litigation. A final version was unveiled July 1.
"This softwood lumber agreement is going to herald a period of stability, predictability and dynamism in the Canadian softwood lumber industry, unlike we've seen in a long, long time," Emerson said.
Opponents have criticized the deal for not getting back all the duties, particularly since the World Trade Organization ruled on the side of Canada over the summer, saying the United States failed to comply with international trade rules in its calculation of tariffs on lumber imports.
Canada had argued that the United States artificially inflated antidumping rates, imposing duties totaling more than 27 percent in May 2002, after accusing Canada of subsidizing its lumber industry.
The U.S. Commerce Department, responding to a complaint under the North American Free Trade Agreement, reduced punitive duties late last year from an average of 16 percent to less than 9 percent. Separate antidumping tariffs averaging about 4 percent were not affected.
Canada insists the forest policies of lumber-producing provinces may not mirror U.S. free markets in timber, but they do not amount to subsidies.Associated Press via Duluth News Tribune
