While the leaders of some of Canada’s biggest softwood companies support the deal, an American trade lawyer has warned that it will all but destroy the North American Free Trade Agreement (NAFTA).
The proposed seven-year renewable deal replaces US lumber duties with a Canadian border tax and returns about 80% of the duties collected since 2002.
But, said lawyer Elliot Feldman, it doesn’t recognise any of Canada’s wins under the NAFTA, and it accepts accusations made by the US that Canada unfairly subsidises its timber industry and unfairly sells it below cost in the US.
However, John Weaver, chief executive of Montreal-based newsprint giant Abitibi Consolidated, said rejecting the deal in favour of continued court fights will only prolong “a devastating trade war”.
“Since 2001, softwood lumber litigation has increasingly become a war of attrition,” said Mr Weaver. “Our industry has bled millions of dollars in duties and hundreds of millions in legal fees.”
Canadian timber industry officials are worried that, unless a better arrangement can be secured, jobs could be lost.
“The government has rushed into a political arrangement that risks jobs,” said Jamie Lim, director general of the Ontario Forest Industries Association.
