BARRIE MCKENNA AND STEVEN CHASE
From Tuesday's Globe and Mail
Canada and the United States appear very close to a historic breakthrough in the enduring softwood lumber dispute.
Industry sources who have been briefed on the discussions told The Globe and Mail that U.S. President George W. Bush called Stephen Harper on the weekend to outline an offer. In it the United States would lift duties on Canadian lumber and return most of the $5-billion it has collected from Canadian lumber companies.
In a complex arrangement that would include both a quota and an export tax, Canada would agree to cap its share of the U.S. lumber market at one third, which is roughly the current level.
Mr. Harper is particularly anxious to put the lumber dispute behind him before a possible state visit to Washington in the coming months.
Canadian representatives briefed select Canadian industry officials on the key elements of the U.S. offer yesterday, according to a Canadian industry source.
Mr. Bush wants to remove a long-standing irritant from relations with his country's largest trading partner and get a deal before U.S. Trade Representative Rob Portman moves to the White House as budget director. Mr. Harper has made repairing strained Canada-U.S. relations a priority.
Canadian and U.S. negotiating teams, headed by Michael Wilson, the Canadian ambassador to Washington, and Susan Schwab, the deputy U.S. Trade Representative, have been engaged in intense negotiations in Washington over the past several days.
U.S. officials would confirm only that negotiations are going on.
"We continue to believe that a negotiated settlement provides the only durable, long-term solution to this dispute," said Neena Moorjani, a spokeswoman for Mr. Portman. "We are continuing to discuss this possibility with Canada."
Canadian officials characterized talk of a deal as "speculation."
"Any numbers that might arise from this speculation can't be considered fact," said an aide to Trade Minister David Emerson Monday.
The U.S. proposal would leave many key issues subject to future negotiation.
And the Canadian lumber exporting provinces, led by British Columbia, plus the Canadian and U.S. industries, would also have to agree.
Canada and the U.S. have been embroiled in legal disputes ever since the U.S. slapped duties on Canadian softwood lumber more than four years ago to counter what it says are steep subsidies and dumping.
The two countries continue to battle in court over the level of the U.S. duties, which have been whittled down to less than 10 per cent from nearly 30 per cent as a result of Canadian legal victories.
A looming deadline on Thursday appears to be the immediate catalyst for unveiling a framework deal now. That's the day the Bush administration must decide whether to challenge a NAFTA panel ruling that ordered the United States to cut the main component of its duty to zero.
Canada has won a string of legal decisions before NAFTA tribunals, but has had mixed success fighting its case at the World Trade Organization.
Is it just me,
or is this a bit of politicking to help Harper get a majority?