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No softwood deal: Emerson

[PoliticsWatch Posted 4:45 p.m. April 25, 2006]

OTTAWA  — Trade Minister David Emerson denied in the House of Commons Tuesday that a deal has been reached to settle the long-running softwood lumber dispute. 
  
Emerson's denial comes as media reports suggest a deal is imminent. 

"There is no deal on softwood lumber at this time and when there is the House will be informed," Emerson said. 

The minister noted that over the last five years there have been "at least five occasions when it was alleged that Canada and the United States were close to a deal on softwood lumber.

"I can say that being close does not count," he added.

Emerson did not speak with reporters after question period. 

CTV News reported Monday evening that Canadian and U.S. negotiators are working on a framework that would limit Canada's share of the U.S. market to 34 per cent. 

In return, Canada would receive 78 per cent of the estimated $5 billion that have been collected in duties since 2002. 

Sources tell PoliticsWatch that negotiators for British Columbia, Ontario and Quebec are in Washington to hammer out a framework agreement this week. 

Ontario's lead negotiator is Michael Kergin, the former Canadian ambassador to Washington. 

The White House confirmed Tuesday that U.S. President George W. Bush spoke with Prime Minister Stephen Harper on the weekend about the dispute. 

"They talked about a range of other issues," said White House press secretary Scott McLellan.

"One of the issues that was discussed was the softwood lumber issue. The president would like to see this resolved. I know that the prime minister would like to see it resolved. And both leaders reiterated their commitment to resolving the matter. We remain in discussions with Canadian officials about how to move forward and get this resolved." 

Thursday appears to be a key day in the negotiations. That is when the U.S. lumber coalition must decide whether to appeal a NAFTA panel ruling in favour of Canada. 

Negotiators are going ahead even though an industry consensus in Canada is not present. 

Reuters reported that the Ontario Forest Industries Association is warning that the government may be giving up too much based on media reports of the framework. 

Another key stumbling block is whether the deal would be a quota system or a border tax measure.

Over the last year of the dispute, British Columbia has seen its share of Canada's lumber exports increase to 58 per cent. Quebec's share of Canada's exports over the dispute period has dropped from around 23 per cent to below 19 per cent. 

It also questionable whether the Harper government would want to approve any quota system that would not be approved by Quebec, the province they hope can give them a majority in the next election. 

Under a tax measure scenario, this would require the Harper government to pass legislation through the House of Commons where they have a minority of seats.

: Related Links

> No softwood deal expected at summit 

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