The Justin Trudeau government will keep trade negotiations with the United States on softwood lumber and the North American Free Trade Agreement separate – at least for now – said Natural Resources Minister Jim Carr.
Carr made the announcement alongside International Trade Minister Francois-Philippe Champagne and Foreign Affairs Minister Chrystia Freeland, who was asked whether the government intended to fold softwood into NAFTA.
She declined to answer, describing the question as hypothetical.
Carr, however, told The West Block’s Vassy Kapelos the talks would remain separate.
“We’re talking to the Americans now about softwood lumber, and the NAFTA discussions won’t start until mid-August, so we’re not going to stop talking,” he said.
U.S. President Donald Trump’s administration officially served notice in mid-May of its intention to renegotiate the 1993 NAFTA agreement, triggering a 90-day consultation window before talks between Canada, the U.S. and Mexico begin later this summer.
Almost one month earlier, the U.S. Department of Commerce slapped countervailing import duties as high as 24 per cent on Canadian softwood, arguing Canada unfairly subsidizes its industry by keeping the price of logging artificially low.
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The Liberal government has been careful to characterise last week’s cash infusion as a “support package” rather than a “bailout,” in an effort to avoid running further afoul of protectionist forces in the United States.
“It’s our job to protect Canadian workers, Canadian producers and communities and that’s what this does in the short-term and moving forward,” Carr said.
Though NAFTA is wide-reaching, there are two significant sticking points: neither softwood lumber (which the U.S. argues is subsidized) nor dairy (which is controlled under strict supply management) is included in the trade agreement.
Carr has repeatedly called the American allegations against the softwood lumber industry baseless, saying the U.S. has lost repeatedly when challenged by Canada before the World Trade Organization or under the North American Free Trade Agreement.
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A negotiated settlement on softwood expired in 2015, triggering the latest round of tariffs from the U.S. Canada and the U.S. continue to try to reach another negotiated settlement.
On June 9, the U.S. Department of Commerce is set to decide an anti-dumping claim against Canadian softwood producers, and is expected to add as much as another 10 per cent tariff on top of the countervailing duties.
It took Canada four years to reach a negotiated settlement the last time around, and 15,000 workers lost their jobs in the first year alone. Canadian producers paid about $5 billion in duties then, 80 per cent of which had to be returned to them as part of the negotiated settlement.
With files from The Canadian Press