USTR Tai says the US is open to new timber talks with Canada

USTR Tai says the US is open to new timber talks with Canada

The long-running dispute over Canadian tariffs on softwood lumber is amenable to new negotiations between the two countries, but a major issue still exists, according to U.S. Trade Representative Katherine Tai.

“When and if Canadian industry and the Canadian government are ready to address those issues, we stand ready and willing to enter into negotiations to see if we can once again come to some kind of an agreement with Canada,” Tai said.

A new lumber trade agreement, according to Tai, requires Canada to address American concerns that its policies amount to subsidies for Canadian producers. Tai made this statement at a meeting of the U.S. Senate Appropriations subcommittee.

Canada’s trade ministry had no immediate comment on Tai’s remark. U.S. homebuilders, beset with price inflation for lumber and other building materials, have clamored for President Joe Biden’s administration to remove the anti-subsidy and anti-dumping duties in place on Canadian softwood lumber, ranging from 6.75% to 20.24%, depending on the producer. U.S.

The United States has said that Canadian timber harvested from federal and provincial lands with low government-set stumpage fees constitutes an unfair subsidy, while most U.S. timber is harvested from private land at market rates.

Treasury Secretary Janet Yellen said on Tuesday that Biden was not considering cutting the lumber duties as he deliberates potential tariff relief on Chinese imports to help control inflation. The softwood lumber tariffs are the legacy of a decades-long trade dispute over the structure of Canada’s timber sector that could not be resolved when a quota agreement expired in 2015.

“I talk lumber almost every time I see my Canadian counterpart,” Tai told the hearing, referring to Canadian Trade Minister Mary Ng.

Indicating that the fundamental subsidy dispute is still a major hurdle, Tai said any resolution would depend on Canada’s willingness to address “an unlevel playing field for our industry with respect to how they govern their harvesting and their industry, which has the impact of subsidies for (U.S.) competitors.”

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