Lumber producer sees Canada-U.S. tussle over trees dragging on
WINNIPEG—The odds of settling a long-running dispute between the U.S. and Canada over lumber are looking pretty bleak, according to a key producer.
There’s been no progress to settle the Canada-U.S. fight over softwood lumber as governments have been more focused on renegotiating the North American Free Trade Agreement, said Yves Laflamme, CEO of Montreal-based Resolute Forest Products. The company currently pays about $80 million a year in tariffs, and it’s likely Canada’s legal battle to fight the U.S. restrictions through the World Trade Organization will drag on for another four years, he said.
“I’m not optimistic at all on lumber,” Laflamme said recently in an interview following the company’s second-quarter earnings call. “I’m not expecting any settlement.”
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In a move intended to protect the domestic lumber industry, last year the U.S. slapped average duties of more than 20 per cent on imports of timber from Canada, which supplies more than a quarter of what American builders use each year. Lumber futures traded in Chicago have climbed about 11 per cent over the last 12 months as the trade friction raised concerns over limited supplies.
Disputes between the countries over softwood lumber have caused intermittent friction for years. The latest tensions were reignited in 2016 when the U.S. lumber industry filed a petition asking for duties, which U.S. President Donald Trump’s administration obliged. American producers allege Canadian wood is heavily subsidized and imports are harming U.S. mills and workers. Canadians argue the U.S. depends on its lumber for home construction and won’t be able to meet demand without its neighbour to the north.