A two-year extension to the 2006 Softwood Lumber Agreement (SLA) has been agreed, granting “stability” to the volume softwood trade between the US and Canada.
The SLA, which had been due to expire later this year, was signed by the US and Canadian governments without modification, thereby continuing to give Canadian mills free access to the US market unless softwood prices fall below a certain level (activating export charges and volume limitations).
Both the Canadian and US lumber industries welcomed the extension, but the US Lumber Coalition warned Canadian sawmills to abide by the rules or it would lobby the US government to take enforcement steps.
“The coalition will continue to work with the US government to ensure that this agreement is enforced,” said Steve Swanson, coalition chairman.
“If Canada does not comply, then the US government must continue to take appropriate enforcement steps to effectively address trade agreement violations by Canada,” he said.
The coalition described Canada’s SLA compliance “uneven at best” and pointed to ongoing proceedings against Canada’s misgrading and mispricing of Crown timber in the interior region of British Columbia.
Two cases have already gone against Canadian provinces, costing them C$127m.
The Canadian government said the SLA had facilitated the return of more than C$5bn to Canadian exporters, generating more than C$1.3bn in export charge revenue for provinces.
Canadian softwood lumber exports to the US were worth C$2.6bn in the first 11 months of 2011, with British Columbia accounting for the largest share at 58%.
The British Columbia Lumber Trade Council said exports to the US had fallen significantly and Canadian mills were developing new markets in Asia. But it said an extended SLA would help provide a stable foundation when US housing and lumber demand recovered.
