Aug 4, 2006

Dead Softwood

On July 4, 2006 we published an article A Softwood Shaft that explained that the proposed timber trade deal was unacceptable to Canadian business interests. Two days later we reinforced that position with another article Canada's Trade Follies.

Emerson issued the following statement on July 13:

"We should be very clear this agreement will go to Parliament... This agreement will have to be decided on by Parliament."

The Trade Minister overlooked that fact that the July 1 timber settlement was conditional on 95% of the Canadian lumber companies approving the deal before Parliament could enact the deal.

Their signatures would mean foregoing US$1-billion in duties that stronger negotiation would return to these Canadian companies. Also the Canadian timber firms would have to drop all legal actions even though many prior WTO decisions were going Canada's way. Not exactly good business, regardless of Emerson's political spin.

And Emerson seems to finally get it. He issued a statement on July 31 that stated in part: "If we do not have sufficient buy-infrom industry there really isn't an agreement to bring before Parliament. We have to ... get the agreement supported by the appropriate number of players in the industry. Otherwise, you're dead before arrival."

Forest companies like Canfor says that much work needs to be done on the agreement before anything can be salvaged. Two powerful B.C. lumberers - West Fraser Timber Co. Ltd. and International Forest Products Ltd. - flatly rejected the proposed deal.

We were ahead of the curve on this issue, as you'll read in our July 6 blog Softwood Talk, Talk, Talk.

Now let's change that to Softwood Deal Dead, Dead, Dead.