Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 3 - Appendix
APPENDIX
MINT Opening Statement to Standing Senate Committee
on Agriculture and Forestry
Presented by The Honourable David Emerson, P.C., M.P., Minister of International Trade
June 6, 2006
As you are aware, on April 27, the Prime Minister announced that Canada and the United States had reached an agreement in principle that will provide a basis for ending the longstanding softwood lumber dispute.
This agreement in principle provides the framework for a seven year agreement designed to ensure Canadian producers have access to the U.S. market, to protect Canadian market share and to bring stability to an industry impaired by over 20 years of repeated trade action initiated by US industry.
The provincial governments have come out in support of the framework agreement, as have their respective industries.
A finalized agreement will not only see the revocation of duties, but also the return to Canadian lumber producers of approximately 80 percent of the collected deposits — that is some US $4 billion back into the hands of Canadian exporters. This money will significantly benefit these exporters and will help their workers and the communities in which they are located.
The agreement in principle takes account of different operating conditions across Canada by providing provinces and industry with the flexibility necessary to respond to their specific circumstances, including the exempting of certain regions of Canada and certain products.
For the next seven to nine years, when lumber prices are high — as has been the case for most of the past two years — no border measure will be imposed. When prices are lower, a province can choose the export measure that works best for its industry.
The agreement in principle includes provisions for Canada and the United States, with the full participation of the provinces, to negotiate eventual exits based on policy reforms.
The agreement in principle also includes an innovative mechanism that responds to Canadian industry concerns about the possibility of other lumber-producing countries increasing their exports to the United States at the expense of Canada. The agreement will provide for reduced export charges for Canadian exporters whenever this situation occurs.
A finalized agreement will end the U.S. collection of duties and will result in duty deposits being refunded to importers of record.
The next step involves the detailed work of drafting the legal text and finalizing the agreement. This work is moving forward, with Canadian and U.S. officials exchanging documents and engaging in regular discussions.
This detailed work involves designing the mechanics of the agreement's key features (e.g. disposition of deposits, border measures, surge mechanism, et cetera), passing legislation to implement the border measure, designing a quota system, and drafting legal text. This work is well under way and we are in regular consultations with the provinces and industry.
Once finalized, this agreement will provide certainty and stability to the lumber industry, communities and workers across Canada.
While we will take the time to get it right, we are aiming to complete the agreement in the coming weeks so that the benefits, including an end to border measures and the return of deposits, can start as quickly as possible.
The return of the deposit money will allow Canadian companies to invest in their operations and their people, thereby increasing their productivity and competitiveness.
From the outset, our government has been committed to promoting the best interests of Canada, the provinces, the industry and forest workers and their families and communities.
Once it enters into force, this agreement will pave the way for a stronger bilateral trade relationship facilitating Canada-U.S. collaboration in making North America more competitive.
And importantly, once finalized, this agreement will give our lumber companies, their workers and the communities in which they live a more secure and prosperous future.