Ontario groups' lawsuits revive softwood feud
WASHINGTON -- Days after Canada and the United States agreed to suspend the protracted softwood lumber war, producers in Ontario have opened a major new legal front by challenging the legality of the fragile truce in U.S. courts.
Two Ontario trade groups, representing 98 per cent of the province's lumber industry, launched separate lawsuits yesterday in the U.S. Court of Appeals and the Court of International Trade against the U.S. government and its top trade official, Rob Portman. Separately, they are also suing the Harper government under the Federal Arbitration Act.
The groups -- the Ontario Lumber Manufacturers Association (OLMA) and the Ontario Forest Industries Association (OFIA) -- are trying to force the two governments to allow a North American free-trade agreement dispute panel to complete its review of the case.
That panel was poised to conclude that Canadian lumber is not subsidized, setting an important legal precedent by refuting the main U.S. allegation in the long-running dispute.
Instead, Canada and the United States quietly agreed last week to suspend the subsidies case and not to appoint panelists.
"We're simply trying to get to the end of what we started," OLMA president David Milton said in an interview. "It's a piece of unfinished legal business."
The flurry of lawsuits comes as Canadian and U.S. negotiators are scrambling to finalize a tentative settlement of the dispute reached April 27. They are hoping to have a deal finalized next month.
Jamie Lim, OFIA president, denied that Ontario producers want to scuttle the settlement -- a seven-year deal that would see Canada limit its exports and recoup more than $4-billion (U.S.) in duties.
"No one is trying to derail the deal that we have," Ms. Lim said. "But [the deal] is not right yet."
By thwarting the NAFTA panel from completing its work, Canada may be exposing itself to future U.S. trade challenges, the groups warned. What's more, they said Canadian producers should not be continuing to pay U.S. duties of roughly $40-million a month.
In a statement of claim filed yesterday, the OLMA and the OFIA argued that there is no provision in the NAFTA for a suspension.
Mr. Milton said his members had expected the United States to drop its final appeal. That would have triggered an immediate reduction in the U.S. duties to 2 per cent from about 10 per cent.
Instead, the Bush administration appealed the duties rollback, and then suspended its case in order to protect its legal rights.
"Without finality, we will lose everything we have worked very hard for," added Carl Grenier, executive director of the Montreal-based Free Trade Lumber Council, which represents producers in Ontario and elsewhere.
David Emerson, Minister of International Trade, was not available to comment yesterday, but Brooke Grantham, a spokesman for International Trade Canada, said Ottawa believes the Canada-U.S. softwood deal is legal and will hold up.
"We believe the suspension [by the two governments of a NAFTA panel proceeding] is fitting within the legal authority of the United States and Canada acting together in light of the April 27 framework agreement. . . .
"Under the framework agreement, Canada and the United States have agreed to end all lumber litigation by the date of entry into force of the softwood lumber agreement."
U.S. officials were not immediately available to comment on the lawsuits.
Earlier in the day, the woman slated to replace Mr. Portman as U.S. Trade Representative, said Canada and the U.S. are working hard to have a final deal in place in the next few weeks.
"All the details are being worked out. We hope to get it done as soon as possible, within the next few weeks, and have a final signed document," Susan Schwab, the current deputy trade representative, told her Senate finance committee confirmation hearing.
"We are working to make sure that we put in place a workable solution," added Ms. Schwab, who was the lead U.S. negotiator in the softwood settlement.
