Canadian softwood lumber to be still in demand in U.S. despite trade panel ruling

OTTAWA, Dec. 8 (Xinhua) -- The U.S. International Trade Commission (ITC)'s recent ruling that the American softwood lumber industry has been harmed by Canadian lumber imports might not be so serious a blow to Canada as the U.S. demand remains high, a former U.S. diplomat said.

Canadian softwood lumber will likely be needed for reconstruction in the United States following Hurricane Harvey-related flooding and raging wildfires in the states of Texas and California this year, Sarah Goldfeder, who served as special assistant to two American ambassadors in Ottawa, told Xinhua.

"Softwood land has also been lost in California and throughout the western U.S., so there is going to be a huge demand for softwood in the United States," said Goldfeder, currently a principal with Canadian public affairs firm Earnscliffe Strategy Group in Ottawa.

The ITC announced Thursday its determination that Canadian softwood lumber is subsidized and sold in the U.S. at less than fair value.

Canadian producers will now pay average combined countervailing and anti-dumping duties of 20.83 percent.

Canada is challenging the tariff at the World Trade Organization and a dispute-resolution mechanism in the North American Free Trade Agreement.

In a potentially hot market for softwood lumber in the United States next spring, American lumber producers may not be able to satisfy the growing demand, Goldfeder explained, adding that Canadian lumber could be imported without tariffs if the ITC agrees to extend the duty-free quota for Canada.

"The argument from the American lumber industry has been to create a level playing field between the two countries," she said.p The Canadian softwood industry has an international reputation for its high quality and reliability, she said.

"There is an entire continent - Asia - that loves Canadian softwood lumber," she pointed out. "But that will mean a higher cost of doing business because it will be more expensive to move softwood to a country like China than sending it to the United States."

The United States is the largest customer for Canadian softwood lumber, while China comes in second place with exports valued at 1.6 billion Canadian dollars (1.2 billion U.S. dollars), according to Natural Resources Canada, the federal government's ministry that oversees Canada's forestry sector. Enditem