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Canadian softwood lumber in U.S. crosshairs, B.C. envoy says

A section of forest is harvested by loggers near Youbou, B.C. Wednesday, Jan. 14, 2015. British Columbia’s envoy in the latest softwood-lumber dispute will be back in Washington next week and says recent comments by U.S. President Donald Trump’s trade nominee show he’s “clearly got his crosshairs on Canada.”

JONATHAN HAYWARD/THE CANADIAN PRESS

British Columbia's envoy in the latest softwood-lumber dispute will be back in Washington next week and says recent comments by U.S. President Donald Trump's trade nominee show he's "clearly got his crosshairs on Canada."

David Emerson, who was Canada's international trade minister when the last negotiated softwood-lumber agreement with the United States was signed in 2006, was last month appointed as B.C.'s envoy in the new round of talks. The federal government is leading the file, but B.C. accounts for half of Canada's softwood-lumber exports to the United States and would bear the brunt of the imposition of duties.

Robert Lighthizer, the U.S. President's nominee for trade representative, told a Senate confirmation hearing this week softwood lumber was "at the top of the list" of issues he would address. Mr. Lighthizer said he would end the dispute through a new agreement or litigation.

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Mr. Emerson, in an interview Friday, said Mr. Lighthizer's comments were "concerning but not unexpectedly concerning."

He said past U.S. administrations have put interim duties in place based on fabricated or semi-fabricated information, forcing Canada to "fight the numbers down over a series of rulings and appeals that can take you out five years.

"I've called it a shakedown in the past and I'll continue to call it a shakedown. It's a fully legalized system, which, every time we win, they tweak the legislation to make it a little tougher. And so that's basically the game," he said.

Mr. Emerson said he expects formal negotiations to begin before the summer. If the U.S. administration and stakeholders want to reach a deal, he said it could be done in a matter of months. But if "they want to extract every pound of flesh they can, it could go on for a long time."

Since 1982, this country's softwood-lumber exports have been subject to five separate rounds of U.S. trade litigation. Mr. Emerson said Canada has yet to lose.

The agreement signed in 2006 has expired. In January, prompted by a complaint by the U.S. Lumber Coalition, the U.S. International Trade Commission found there was a reasonable claim that softwood-lumber products from Canada have injured U.S. lumber producers, setting the stage for the imposing of duties.

U.S. lumber producers have complained their Canadian counterparts pay below market rates to cut down trees because Canadian forests are largely owned by provincial governments. The U.S. companies contend that constitutes a subsidy and it gives Canadian firms an unfair advantage.

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Mr. Emerson is a former chief executive officer of Canfor, one of B.C.'s largest lumber exporters. When he was appointed as B.C.'s envoy for the softwood-lumber talks, Premier Christy Clark said he was "probably the most skillful and knowledgeable person in this area that we could send to the States on our behalf."

B.C.'s softwood-lumber industry last year sent $4.6-billion worth of exports to the United States.

Mr. Emerson said he will be back in Washington on Wednesday for what he termed "prenegotiations."

"It's really just to continue with some of the contacts that we've made and talk to some additional people. At this stage, it's really getting our ducks in a row, getting our allies lined up, identifying who's against us and why, and putting together the elements of an approach on how we go forward once negotiations kick in," he said.

"I wouldn't want to dignify it by calling it negotiations at this stage, but I think everybody is kind of doing the prenegotiation dance, if you like."

Mr. Emerson said officials expect to learn more about the imposing of a countervailing duty in late April, and an anti-dumping duty by late June.

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With a report from Justine Hunter

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