U.S. lumber representatives vow to keep the pressure on Canadian forest companies – including increasing trade tariffs – as long as the Canadian government refuses to accept a negotiated solution to the softwood lumber dispute.
“The problem with litigation is that, first of all, if you lose, you lose big and all the money goes into our pockets. That’s the law,” said John Ragosta, spokesperson with the U.S. Coalition for Fair Lumber Imports.
About $2 billion in deposits against duties owed by Canadian companies in the almost three-year-old dispute will be paid to the U.S. counterparts if a new export agreement isn’t reached.
“Furthermore, if you go with litigation, if you don’t do something long-term, we can keep doing this however long you want to do it,” said Ragosta.
Canada missed an opportunity to put an end to the duties when in the fall it turned down a negotiated solution to the almost three-year-old dispute, said Ragosta.
“The idea was that everybody would ship a little bit less, but everybody gets to be profitable. If you go the litigation route, obviously you get big winners and big losers.”
The U.S. commerce department has now agreed to investigate nine more subsidy charges forwarded by the lumber coalition.
They say Canadian companies not only continue to enjoy historic government subsidies, but that they have benefited from new subsidies in the way of grants and low-cost loans since the duties were first imposed.
If the commerce department agrees with the coalition, it would increase countervailing tariffs by up to six per cent, he said.
The total penalties Canadian companies could find themselves paying might “easily be up to 45” per cent when a final determination is made next November.
“One of the things the commerce department is looking at anyway is the fact that British Columbia, for example, once the duties were imposed, lowered the timber fees even further. Well that just increases the subsidy.”
John Allan, head of the B.C. Lumber Trade Council and the Council of Forest Industries, was not available for comment.
Countervailing duties of 19 per cent were reduced to 13 per cent in the fall, but the coalition is seeking to have them reinstated at close to 20 per cent, not including the current charges, said Ragosta. It is also seeking increases to the nine per cent anti-dumping duties paid by Canadian companies.
The U.S. commerce department starts its next administrative review in April.
It will release a preliminary finding in June, with a final determination of duties owed by Canadian companies by November.