By Eric Martin and Theophilos Argitis – Jan 23, 2012
The U.S. and Canada agreed to extend their five-year-old softwood-lumber agreement through 2015, five days after President Barack Obama denied a permit for an oil pipeline backed by the Canadian government.
The lumber accord, set to end in October 2013, will remain in effect for two additional years, both governments said today in statements. Canada exported $2.6 billion of softwood to the U.S. in 11 months through November, and the wood-products industry and related business had 164,000 employees in 2010, according to Canadian trade ministry data. Obama’s action on the Canada-U.S. pipeline hasn’t soured relations, Canadian Trade Minister Ed Fast told reporters in Washington today.
“The trade relationship between Canada and the United States remains strong,” he said. Obama rejected a permit for Calgary-based TransCanada Corp. (TRP)’s Keystone XL project, citing too little time under a deadline set by Congress.
Under the 2006 lumber agreement, the U.S. agreed to stop imposing duties designed to deter unfair practices, and Canada agreed to apply export charges and volume limits on U.S. shipments when wood prices fell below a certain level. The agreement is being extended without changes, according to a statement from the U.S. Trade Representative’s office.
“The administration’s record on softwood lumber demonstrates our steadfast commitment to ensuring fair trade that benefits American businesses and workers,” U.S. Trade RepresentativeRon Kirk said in a statement.
On Keystone XL, Fast said the 1,661-mile (2,673-kilometer) pipeline from Canada to refineries along the U.S. Gulf coast will be approved. Obama is letting TransCanada file a revised route that avoids an environmentally sensitive area in Nebraska.
“If the project is evaluated and assessed on its merits, it will be approved,” Fast said. “I share the prime minister’s deep disappointment that the decision was made to turn down the application. I also note President Obama went out of his way to invite TransCanada to reapply.”