More about Lumber dispute between The US and Canada

Yesterday we ventured into the topic of International Trade and more specifically the United States’ importing of Canadian Soft lumber primarily from British Columbia in western Canada. 

Strong differences of opinion have existed for the past thirty-five years and those differences are between two nations that are amazingly close friends.  It does seem odd for such good friends to be arguing about the same issue for so long.  However, there are huge differences of opinion on both sides of this issue.

The US lumber industry is convinced that Canadian lumber is unfairly subsidized by both the Federal and Provincial government and that creates a difficult market for US lumber producers.  The US lumber industry wants import tariffs placed on Canadian imports to counter act what they see as Canadian government subsidies. 

It is no surprise that the Canadian government disputes this claim and points to various points within the trade laws and agreements between the two countries that do not allow those tariffs to come into play.

The specific ins and outs of the trade agreements are very intricate and complicated; it is difficult to fairly understand the entire issue as both sides have a series of valid thoughts.

Over the past thirty-five years both countries have had four specific interations or attempts to solve the problem.  Each successive agreement has built on the previous set of accords.  The current set of agreements is scheduled to expire this summer creating a situation where lumber prices could easily skyrocket in The US.

Don’t forget that The US and Canada have very recently had national elections and that obviously complicates the issue even more.   

Both sides on this issue are optimistic and see that this summer there is the possibility of another set of agreements could be reached.  In the recent past the solution has been to simply extend the current agreements for another length of time.  There is a need now for a thorough solution that allows such close friends to continue to work together. 

This really is a big deal and a huge factor in the American housing industry.

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