WASHINGTON — A two-year extension to the Softwood Lumber Agreement between the United States and Canada was announced this earlier week. The SLA, which began in 2006, will now remain in effect through October 2015.

The Softwood Lumber Agreement, which prohibits the Canadian federal and provincial governments from providing new subsidies to the Canadian lumber industry, has come under scrutiny by both sides. In one instance, in response to dispute settlement proceedings initiated by the United States, on Jan. 21, 2011, the London Court of International Arbitration (LCIA) ruled that subsidies provided by the Ontario and Quebec governments in late 2006 and 2007 to lumber manufacturers in their provinces violated the terms of the SLA. This has resulted in additional export taxes being assessed for the duration of the SLA.

The decision to extend the SLA is being lauded by a number of U.S. industry groups including the U.S. Lumber Coalition. "The Softwood Lumber Agreement is a compromise agreement that is not ideal from the U.S. industry's perspective. Nevertheless, we support extension of this agreement with the expectation that Canada will improve its record of compliance with this trade agreement,"  Steve Swanson, Chairman of the Coalition and president of the Oregon-based Swanson Group, said in a statement.

"It is essential that Canada complies with, and lives up to, its obligations under this trade deal," Swanson added. "Improved Canadian compliance would give U.S. industry the confidence it needs in Canada's compliance with its trade obligations to pursue long-term trade agreements instead of returning to traditional trade litigation."

 

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