Chances of a compromise resolution to the longstanding Canada-U.S. softwood lumber dispute appeared to dwindle on Tuesday after the U.S. side tabled a tough new proposal at talks in Washington, D.C.
The package includes a lumber export tax to replace U.S. duties, which Canada has previously accepted in principle. But it's pegged far higher than Canadian lumber-producing would deem acceptable, a source told The Canadian Press.
The U.S. proposal also puts a ceiling on lumber exports from British Columbia. American producers apparently fear their domestic market would be flooded with high volumes of wood from the B.C. Interior, where accelerated logging is underway to quell a massive pine-beetle infestation.
The Americans also have not budged on a previous demand to keep about half the $5 billion in lumber duties already paid by Canadian producers since tariffs were imposed in May 2002.
The U.S. proposal's so-called "exit ramp'' to get out from under tariffs permanently would require provinces to institute market-based reforms to their forest policies that would raise stumpage anywhere from 100 to 230 per cent, with no provision for future reductions in the Crown timber-cutting fee...
Just for a refresher: when it comes to softwood lumber, the U.S. wants mandated export taxes, import quotas, dictated changes to Canadian policy, and the ability to retain the spoils of past trade obstruction. And all this while American consumer groups want the tariff lifted since it's adding $1500 to the cost of a new house.
When it comes to CAFTA, the U.S. wants Central America to buy into free trade agreements in order to stabilize trade and open markets.
I wonder if the CAFTA partners are paying attention to what's coming out of the other side of the administration's mouth.
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