The Softwood Lumber Agreement (SLA), between the United States and Canada, first agreed upon in 2006, expired this week. Both the National Lumber Coalition and the British Columbia Lumber Trade Council have pushed for negotiations between the U.S. and Canadian governments on a new deal.
The United States and Canada agreed in 2012 to extend the deal for two years. However, governments on both sides have now reached a standstill as the U.S. government believes that the deal is now outdated while according to the U.S. Lumber Coalition the Canadians have not yet been willing to negotiate.
Thanks to a standstill provision in the 2006 agreement, both sides have a year to come to a new agreement before the United States can bring any type of trade actions against the Canadian suppliers.
According to the Office of the United States Trade Representative: "Under the SLA, Canada agreed to impose certain measures to affect the price of softwood lumber exports to the United States. The SLA provides that Canada may not circumvent those export measures, including through providing grants or other benefits. By selling timber harvested from public lands in the Interior region of British Columbia for prices below those provided for under the timber pricing system grandfathered under the SLA, Canada provides a benefit to Canadian softwood lumber producers in circumvention of the export measures provided for in the Agreement"
With the Coalition intending to help the government reach a new agreement, Chairman Charlie Thomas said that if the Canadians continue to avoid negotiation, "the U.S. industry will eventually have no choice but to use our rights under U.S. trade laws to offset the unfair advantages provided to Canadian industry"The BC Lumber Trade Council believes that its government should be willing to negotiate because the deal has been mutually beneficial. But the council's president, Susan Yurkovic, said "...we are also actively preparing to defend BC's softwood lumber industry against any potential legal challenges brought by
the United States..."Information provider RISI examined the possibilities that would occur following the expiration of the SLA. It predicted an increase in softwood prices rather than a depression because market forces will push prices that direction.