2006/7/6
TORONTO (CP) - The controversial Canada-U.S. softwood lumber agreement got a vote of confidence Tuesday from the country's largest lumber exporter but remained under widespread attack from industry, political and union leaders.
There has been a widespread outcry in recent days since Canadian officials began circulating proposed detailed wording for an agreement to settle the long-standing dispute over softwood lumber exports to the United States.
The Alberta Softwood Lumber Trade Council became the latest industry association to publicly reject the pact with a statement issued Tuesday, echoing earlier comments by the Ontario Lumber Manufacturers Association and the Ontario Forest Industries Association.
However, a spokeman for Canfor Corp. (TSX:CFP) - a Vancouver forestry giant once headed by International Trade Minister David Emerson - thinks the Vancouver-based company can live with the agreement the minister signed Saturday in Geneva along with his U.S. counterpart.
"Canfor went into the weekend having communicated a few concerns around parts of the agreement," company spokesman Lee Coonfer said in an interview Tuesday from Vancouver.
"We communicated those concerns to both the federal and provincial government and over the course of the weekend we feel that they have done an appropriate job getting enough accommodations on our concerns that we can support the agreement," Coonfer said.
Coonfer declined to specify what issues were raised or what changes were made to the text of the proposed treaty, which still requires parliamentary approval to become law and sufficient industry support to come into force.
The deal would allow the U.S. to keep about $1 billion US of the $5 billion collected in penalties on Canadian softwood since 2002 and limits shipments south of the border if American lumber prices begin to fall.
The framework of the deal was originally announced in April by Prime Minister Stephen Harper as a long-term solution to the intractible trade dispute that has bedevilled Canadian lumber producers and successive governments for decades.
A number of industry and political players said they were surprised to learn last week that detailed text of the agreement included an escape clause, that could allow either side to walk away after 36 months.
Emerson has countered that the deal is still for seven years, with an option to extend for another two years, and that it was unlikely for either country to walk away prematurely from a deal of this magnitude.
"The deal is not good for Alberta's lumber producers, and does not adequately address our specific needs on a number of fronts," Trevor Wakelin, chair of the Alberta Softwood Lumber Trade Council, said in a statement Tuesday
"The April 27th framework proposed a seven-to nine-year time frame - the current draft could effectively end in about three years. That is not a long-term deal, it does not provide operating certainty, and in its current form is unacceptable to most Alberta producers."
Industry support for the pact is critical for the agreement to work, however, because the deal includes a provision that the vast majority of litigation by provinces, industry associations and companies be resolved first.
In addition, under another provision, the federal government is demanding sufficient support for a plan that will see Ottawa reimburse Canadian lumber producers for the duties they've paid to the United States but, in return, demand that the Canadian companies sign over their rights to the U.S. payments, which could take longer to process.
Carl Grenier, executive vice-president of the Free Trade Lumber Council, said it's too early to know whether the Canadian producers will use those clauses to block the deal.
"Certainly, a number of companies are in financial trouble and that's understandable given the huge take on their bottom line over the last four years," Grenier said from Montreal.
"But on the other hand, some of the companies may be in better shape and may decide they don't like this deal and so they may not abide by these two clauses."
In a radio interview broadcast Tuesday, Emerson defended the deal:
"As in any negotiation, you don't get everything you want, but we certainly did pretty well, better than I've ever seen us do in the past," Emerson, a former chief executive of Canfor, told CHNL of Kamloops, B.C., .
"The demands keep coming, the goalposts keep shifting. It may be that people are prepared to just walk away thinking that somehow if they get intransigent enough that the world will come their way."
Meanwhile, New Democrat Leader Jack Layton demanded Tuesday during a visit to Kenora, Ont., that Parliament be recalled for a debate on the pact, which he said will result in an all-out attack on the Canadian lumber industry.
The Communications, Energy and Paperworkers and United Steelworkers unions and the B.C. Federation of Labour also came out against the weekend deal.
"The framework was a rush job in April to meet a false deadline and this latest signing is another move by the federal government to create a photo-op for the Prime Minister with his friend George Bush," Steelworkers national director Ken Neumann said in a statement.
Harper arrives at Andrews airforce base near Washington, D.C., on Wednesday afternoon. He'll meet Thursday morning with President George W. Bush at the White House for about 40 minutes before the two leaders hold a joint news conference. |