Canada and the U.S. are gearing up for another fight over trees.
U.S. Trade Representative Michael Froman will meet Canadian Trade Minister Chrystia Freeland and Canadian industry groups in Toronto Wednesday in an attempt to end gridlock in a softwood lumber dispute that has been simmering for decades. The U.S. could seek tariffs that top 30 percent against Canadian producers such as West Fraser Timber Co. as early as next week. The duties could prompt Canadian companies to curtail output or shut down mills.
"It's going to be ugly," said Kevin Mason, managing director of ERA Forest Products Research, a Vancouver-based financial research company. "There's going to be mill closures. It's going to be messy."
The dispute over softwood lumber has been one of the thorniest between the world's two largest trading partners, with the spat gathering steam in the early 1980s when U.S. companies claimed Canada gave producers access to cheap timber on government land. The battle ended when both signed the Softwood Lumber Agreement in 1996, establishing tariffs and quotas on Canadian imports. A second accord expired in October 2015, allowing Canada to ship lumber tariff-free for a year to give both parties time for talks on a new deal. read more >>