Lumber dealers can expect little—if any—change when a major trade agreement between the U.S. and Canada likely expires next month.
The Softwood Lumber Agreement, what was once called the Grandaddy of all Canadian / U.S. trade disputes, is set to expire on Oct. 12, 2015, but it is unlikely we’ll see a new agreement until next fall, said Ben Gann, Vice President of Legislative and Political Affairs for National Lumber and Building Materials Dealers Association in Washington, D.C..
Gann expects that the coming political elections in both countries will delay any real action on a revised agreement potentially until 2017. “Canada’s parliamentary elections are next month and the U.S. federal elections are in November 2016,” Gann said. “It is unlikely that we will see a new agreement until next fall at the earliest.” If either country wanted to make changes to the deal, both countries are prohibited from taking unilateral action for one year following the expiration of the agreement, Gann added. “So even if it is October 13, 2016, and there is no agreement, I doubt either country will launch a trade action. Both countries appear willing to reach an agreement after a new president takes office in the U.S.”
British Columbia’s Minister of Forests, Lands and Natural Resources Operations Steve Thompson has said that he would like to see the agreement extended in its current state. The current deal has been in place since 2006, and was last extended for a two year period in 2012. Under the 2006 agreement, the U.S. agreed to return more than $5-billion in duties collected from Canadian lumber companies, The Financial Post reported in 2014.
According to NLBMDA’s 2015 National Policy Agenda, the group “opposes efforts to reopen the softwood lumber agreement between the U.S. and Canada.” Gann said that NLBMDA’s official position is to support an extension of the current agreement.
“However, should the agreement expire, it is important that a trade war does not ensue and product supply from Canada remains available to meet building demands in the U.S.,” Gann said.
Business In Vancouver reports that the deal is likely to expire next month and enter the one-year standstill period. The Vancouver Sun recently published a column from Naomi Christensen, author of “Branching Out: Preparing for life without a softwood lumber agreement,” in which she recommends Canada pursue a new SLA with the U.S. as well as expand its market in Asia.