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Canadian 'subsidies' on softwood lumber spark US tariffs demands
A US-CANADA trade dispute over softwood lumber is escalating, raising the likelihood of higher American tariffs as officials try to reach an October deadline to make a deal.
At issue is whether not charging Canadians and such as Americans is a "subsidy", which is defined as "a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low".
Americans have long complained that Canadian "stumpage" prices for standing timber constitute an unfair subsidy, which is a matter of taking money from loggers rather than giving it to them.
Stumpage is the price loggers pay for the right to take trees from a given stretch of land. It is paid to the land owner.
Almost limitless Canadian forests exist on government land while much more limited land used for logging in the US is privately owned.
The difference between en the cost of acquisition of harvested timber between the two is the cause of the dispute.
Because the US private owners charge more, the US says the Canadian system charges too little, which amounts to a subsidy in the eyes of Americans. Canadians says it does not - not if the dictionary definition of a subsidy prevails.
US President Barack Obama and Canadian Prime Minister Justin Trudeau directed their negotiating teams to reach an accord, but optimism is fading, reports Bloomberg News.
Canada's Ambassador to the US, David MacNaughton, and the country's chief softwood lumber negotiator, Martin Moen, have each said this month the sides remain far apart.
If the deadline is missed, the US is expected to enact new tariffs, which would be a barrier to Canadian producers.
Monthly softwood exports to the US are up 23 per cent on average, data compiled by Bloomberg shows.
A spokesman for US Trade Representative Michael Froman didn't respond to requests for comment.
At issue is whether not charging Canadians and such as Americans is a "subsidy", which is defined as "a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low".
Americans have long complained that Canadian "stumpage" prices for standing timber constitute an unfair subsidy, which is a matter of taking money from loggers rather than giving it to them.
Stumpage is the price loggers pay for the right to take trees from a given stretch of land. It is paid to the land owner.
Almost limitless Canadian forests exist on government land while much more limited land used for logging in the US is privately owned.
The difference between en the cost of acquisition of harvested timber between the two is the cause of the dispute.
Because the US private owners charge more, the US says the Canadian system charges too little, which amounts to a subsidy in the eyes of Americans. Canadians says it does not - not if the dictionary definition of a subsidy prevails.
US President Barack Obama and Canadian Prime Minister Justin Trudeau directed their negotiating teams to reach an accord, but optimism is fading, reports Bloomberg News.
Canada's Ambassador to the US, David MacNaughton, and the country's chief softwood lumber negotiator, Martin Moen, have each said this month the sides remain far apart.
If the deadline is missed, the US is expected to enact new tariffs, which would be a barrier to Canadian producers.
Monthly softwood exports to the US are up 23 per cent on average, data compiled by Bloomberg shows.
A spokesman for US Trade Representative Michael Froman didn't respond to requests for comment.
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