Softwood Lumber

PRIME MINISTERS OFFICE Liberal Government On behalf of the Right Honourable Paul Martin, I would like to acknowledge receipt of your letter of October 25, with which you enclosed several resolutions of the Union of British Columbia Municipalities UBCM. You may be assured that the view expressed in the resolutions have been carefully considered. As copies of your correspondence have already been sent to the Ministers within whose responsibilities these matters fall, I am certain that they will have appreciated receiving this information. NATURAL RESOURCES CANADA Liberal Government ...Regarding trade, I am pleased that the Union of British Columbia Municipalities is supporting the federal governments objectives in reaching a fair settlement of the softwood lumber dispute with the United States. MINISTRY OF INTERNATIONAL TRADE Liberal Government ...I wish to assure you that finding a resolution to the long-standing softwood lumber dispute with the United States is a top priority for the Government of Canada. Indeed, the Government of Canada, in consultation with Canadian stakeholders, continues to explore every possible option to resolve this dispute, including litigation with the possibility of retaliation, high-level political intervention and advocacy. With respect to the litigation, after a complete three-year North American Free Trade Agreement NAFTA process, an Extraordinary Challenge Committee ECC affirmed on August 10, 2005, that the United States had no basis to conclude that Canadian softwood posed a threat of material injury to U.S. producers. This decision effectively removes the basis for U.S.-imposed duties on Canadian softwood lumber. The United States, however, has indicated that it will continue to collect duties and that duty deposits will not be refunded. Canada considers the U.S. reaction to be contrary to U.S. trade obligations and U.S. law. Canada will challenge the U.S. position before the U.S. Court of International Trade and will vigorously pursue this case to defend Canadian interests. In response to the U.S. action, I spoke with U.S. Trade Representative Rob Portman to register Canadas serious concern with the U.S. response to the ECC decision, and to indicate that negotiations with the United States, which had been tentatively scheduled for the week of August 22, would not take place. Canada has also requested World Trade Organization WTO authority to retaliate against the United States in three separate cases. WTO decisions on these requests for retaliatory authority are expected in mid-2006. In addition, Canada has already imposed retaliatory measures against the United States for its failure to repeal the WTO-inconsistent Byrd Amendment. With respect to your resolutions, I want to especially applaud your resolution on Canada-U.S. trade relations and the initiative that the UBCM members have proposed. I look forward to receiving an update on your organizations efforts at engaging with your U.S. counterparts. As you are aware, the government is committed to increasing our efforts in the United States to persuade key U.S. audiences to adopt a stance favourable to the resolution of this dispute. Across the United States, representatives from the Government of Canada are taking advantage of every opportunity to put our message, and our position, before American decision-makers, and those with influence on the lumber file. I look forward to the UBCM and its members contributing to this effort. Please be assured that Canada is committed to a long-term, durable resolution to the softwood lumber dispute that would provide our industry with stability and certainty. Negotiations, however, will only take place when it is in Canadas interest to return to the negotiating table. In the meantime, we will continue to press the United States to uphold its international trade agreement obligations and seek a resolution to the long-standing softwood lumber dispute.