WASHINGTON, Oct 8 (Reuters) - The U.S. Trade Representative's office said on Friday it has asked the Canadian government for trade consultations on apparent subsidies provided by the province of British Columbia to Canadian softwood lumber producers, the first step in launching a trade complaint on the issue.
'The United States and Canada have been engaged in discussions regarding the apparent under-pricing of timber harvested in the interior region of British Columbia for many months, but those discussions have so far been unsuccessful,' U.S. Trade Representative Ron Kirk said in a statement.
Kirk said it appeared that British Colombia was selling timber at an unfairly low price to Canadian softwood lumber producers to circumvent certain export measures required under a 2006 bilateral lumber pact.
The Canadian government did not immediately comment.
Lumber imports are a top political issue in border states including Maine and Montana, and Kirk had telegraphed this summer that the government could proceed with a case.
British Columbia is home to major lumber producers Canfor Corp and West Fraser Timber Co.
Some US lumber producers have complained that rival firms in British Columbia have unfairly benefited from the reduced prices the provincial government is charging for access to trees killed off in a decade-long infestation of mountain pine beetles.
The province says the reduced stumpage rates reflect the lower value of the wood which is more difficult to process in sawmills, but U.S. producers have charged that the prices are too low and applied to trees that are still in good condition.
The fees are also intended to encourage harvesting of the dead trees that pose a forest fire danger and will eventually become unusable for logging if they remain in the forest for too long.
The United States and Canada have fought in courts for decades over lumber trade, but agreed in 2006 to a deal to end litigation and solve disputes through arbitration.
Under the rules of that pact, the two sides have to begin talks within 20 days but either side can ask for binding arbitration if a deal is not struck within 40 days.
'These consultations offer an excellent opportunity to resolve this long-standing implementation concern, and I hope that Canada will take it,' Kirk said.
The fight stems from different timber ownership structures. In the United States, much land is privately held, while in Canada, provincial governments own most timber and charge fees to log it.
'British Columbia's stumpage practices depress already weak lumber markets at a cost of U.S. jobs in communities that can least afford such losses,' Steve Swanson, chairman of the Washington-based Coalition for Fair Lumber Imports said in a statement welcoming Kirk's announcement.
(Reporting by Doug Palmer and Roberta Rampton in Washington, David Ljunggren in Ottawa and Alan Dowd in Vancouver; Editing by Philip Barbara and Vicki Allen) Keywords: TRADE USA/SOFTWOOD (doug.palmer@thomsonreuters.com; +1 202 898 8341; Reuters Messaging: doug.palmer.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'The United States and Canada have been engaged in discussions regarding the apparent under-pricing of timber harvested in the interior region of British Columbia for many months, but those discussions have so far been unsuccessful,' U.S. Trade Representative Ron Kirk said in a statement.
Kirk said it appeared that British Colombia was selling timber at an unfairly low price to Canadian softwood lumber producers to circumvent certain export measures required under a 2006 bilateral lumber pact.
The Canadian government did not immediately comment.
Lumber imports are a top political issue in border states including Maine and Montana, and Kirk had telegraphed this summer that the government could proceed with a case.
British Columbia is home to major lumber producers Canfor Corp and West Fraser Timber Co.
Some US lumber producers have complained that rival firms in British Columbia have unfairly benefited from the reduced prices the provincial government is charging for access to trees killed off in a decade-long infestation of mountain pine beetles.
The province says the reduced stumpage rates reflect the lower value of the wood which is more difficult to process in sawmills, but U.S. producers have charged that the prices are too low and applied to trees that are still in good condition.
The fees are also intended to encourage harvesting of the dead trees that pose a forest fire danger and will eventually become unusable for logging if they remain in the forest for too long.
The United States and Canada have fought in courts for decades over lumber trade, but agreed in 2006 to a deal to end litigation and solve disputes through arbitration.
Under the rules of that pact, the two sides have to begin talks within 20 days but either side can ask for binding arbitration if a deal is not struck within 40 days.
'These consultations offer an excellent opportunity to resolve this long-standing implementation concern, and I hope that Canada will take it,' Kirk said.
The fight stems from different timber ownership structures. In the United States, much land is privately held, while in Canada, provincial governments own most timber and charge fees to log it.
'British Columbia's stumpage practices depress already weak lumber markets at a cost of U.S. jobs in communities that can least afford such losses,' Steve Swanson, chairman of the Washington-based Coalition for Fair Lumber Imports said in a statement welcoming Kirk's announcement.
(Reporting by Doug Palmer and Roberta Rampton in Washington, David Ljunggren in Ottawa and Alan Dowd in Vancouver; Editing by Philip Barbara and Vicki Allen) Keywords: TRADE USA/SOFTWOOD (doug.palmer@thomsonreuters.com; +1 202 898 8341; Reuters Messaging: doug.palmer.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2010 AFX News
