US-Canada Lumber Agreement Enters Into Force

by Mike Godfrey, Tax-News.com, Washington

17 October 2006

US Trade Representative Susan C. Schwab announced last Thursday that the US-Canada Softwood Lumber Agreement had entered into force.

As a result, both the United States and Canada will begin to implement their obligations under the agreement. For Canada, based on current market prices for softwood lumber, this will require the immediate collection of an export tax.

With respect to the United States, this will result in revocation of the antidumping and countervailing duty orders on softwood lumber from Canada, an end to the collection of duty deposits on imports of Canadian softwood lumber, and the initiation of the process to refund duty deposits currently held by US Customs and Border Protection.

"I am absolutely delighted that we have closed this long-running dispute that has for too long created friction with our largest trading partner," announced Ambassador Schwab.

She added:

"This agreement will move us beyond the uncertainties created by the intense litigation that has extended over two decades, benefit consumers by adding stability in the market, and create opportunities for the US and Canadian industries to work together to resolve issues of concern. I am grateful for the leadership of President Bush and Prime Minister Harper, and the efforts of Canada’s Minister for International Trade David Emerson and Ambassador to the United States Michael Wilson, in accomplishing this historic agreement."

Ambassador Schwab also announced plans for the disbursement of funds to advance meritorious initiatives in the United States as outlined by the agreement. The three meritorious initiatives identified by the agreement include: (1) assistance for timber-reliant communities; (2) low-income housing and disaster relief and; (3) promotion of sustainable forest management practices.

Of the $450 million provided for meritorious initiatives under the agreement, the United States Endowment for Forestry and Communities, Inc. was identified to receive $200 million, the American Forest Foundation was identified to receive $150 million, and Habitat for Humanity International was identified to receive $100 million.

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