Trudeau and Obama release joint statement on softwood lumber after first day of ‘Three Amigos’ summit

Prime Minister Trudeau and President Obama have released a joint statement on the state of softwood lumber trade negotiations.

The industry had long been a sore spot for trade agreements between the two countries until a trade deal was signed in 2006 and renewed in 2012. That agreement expired last year and attempts to ink another one have failed so far.

According to the statement, US Trade Representatives and Canadian Minister of International Trade were instructed to “intensively explore all options” back in March. The discussions have been described as “challenging but productive.”

The softwood lumber industry is vital to both countries. Canada is the largest exporter of softwood lumber to the US and the statement describes the States as “Canada’s most important customer.” But even after months of discussions, significant differences between the two sides remain and time is running out. On October 12, if no new agreement has been reached, the US will be free to start trade action, including levelling tariffs against Canadian softwood.

The repercussions of not reaching a deal could be huge for BC, which produces half of the country’s softwood lumber exports to the US. The province would bear the brunt of job losses if the US reinstates tariffs on Canadian wood products. Before an agreement was signed in 2006, an estimated 10,000 forestry industry jobs were lost.

Premier Christy Clark has been vocal on the subject, saying Canada needs to make the right deal. That means not accepting quotas, something US lumber producers have been lobbying hard for.

BC’s Ministry of Forests released a response to the joint statement this morning, voicing support for a managed trade agreement.

“If a reasonable negotiated settlement cannot be reached, B.C. is
confident that, working with the federal government, it will
successfully defend its market-based forest policies against any U.S.trade action brought by the U.S. against Canada, as it has done in the past.”

The joint statement covers nine key features that will be the focus of negotiations going forward. They include an appropriate structure to administer the agreement, provisions for regional and company exclusions and enforcement tools.

A new agreement must be equitable and flexible, providing confidence and stability for both sides and able to respond to changing market conditions.

Negotiators now have a little more than four months to close the gap and forge an agreement both sides can accept.

You can read the full statement here.