Governors from the western U.S. converge on Whitefish this week for the annual Western Governors Association. Monday, they talked about international trade agreements between the U.S. and Canada.
The round table discussion between 10 western governors, a Canadian ambassador, and the premier of Saskatchewan, began with a question about the ongoing softwood lumber trade dispute between the two countries.
A trade deal known as the softwood lumber agreement expired in 2015, resulting in Canadian lumber heading south and undercutting U.S. sales.
Idaho Governor Butch Otter wanted to know the progress of a new deal.
"There is a lot at risk in the United States on our lumber supplies and our percent of the market that we have lost since the expiration of that agreement," Otter said.
The softwood lumber agreement was originally made in 2006 to set export taxes on Canadian government subsidized lumber heading south into the U.S. This was done with the hope that the taxes would help U.S. lumber compete with the subsidized lumber coming in from Canada.
But that trade deal didn’t work, according to Matt Gold, who teaches law at Fordham University. Gold also served as the Chairman of the U.S. Delegation to the U.S.-Canada softwood lumber talks. He says the expired softwood lumber agreement required the U.S. to trust that Canadian officials were accurately imposing the export tax.
"Although the national government in Ottawa has acted with good faith in respect to the United States in most trade issues, the provincial governments, together with the provisional lumber industries, which were responsible for administering the softwood lumber agreement, acted with less good faith. And under the softwood lumber agreement, the United States didn’t have the ability to monitor or to audit the process by which they determined export taxes would be," Gold says.
David MacNaughton, Canada’s Ambassador to the United States, says attempts to reach a new softwood lumber agreement with the Obama administration ended with frustration.
Speaking at the WGA panel Monday, MacNaughton said talks of a new deal are improving under the Trump administration. But he says it’s a challenging issue for both countries, especially for government leaders in communities where timber supports the economy.
"We’re talking about real people's jobs, and real communities, survival," MacNaughton said.
While talks of a new softwood lumber agreement have improved in recent months, MacNaughton says the U.S. and Canada have yet to find a compromise.
