Reuters/CNNMoney.com: Knock on Softwood: Canada-U.S. Deal Should Hold
Washington, D.C., partner Elliot Feldman, leader of Baker Hostetler's international trade practice, was quoted in an April 9, 2009, Reuters article, "Knock on Softwood: Canada-U.S. Deal Should Hold," which also appeared on CNNMoney.com.
According to the article, the U.S.-Canada softwood lumber agreement (the result of the longest-running trade saga between the world's two largest trading partners) may be the trade deal that everyone loves to hate, but despite renewed complaints neither country seems eager to give up on the pact just yet. In the first test of the 2006 deal, the U.S. government said it will tack a 10 percent duty on some imports of Canadian lumber, taking Ottawa to task for a 2007 infraction. Most experts, however, think the deal, designed to last at least seven years, will hold for now.
But Canada's tolerance of the deal may wane amid upcoming arbitrations, said Feldman. Later this year, a tribunal will rule whether government programs in Ontario and Quebec violate the deal. Damages could range between $400 million and $1 billion, Feldman said.
U.S. lumber producers are also eyeing the British Columbia lumber stumpage pricing system as a future arbitration target. It is the home base of lumber giants Canfor Corp and West Fraser Timber Co ., which both have expanded their operations in the U.S. southeast in recent years. "That one will surely be a death sentence for the agreement," said Feldman, who has represented Canadian companies in past cases. "The question becomes, when do you pull the plug?"