Dive Brief:

• The Canadian softwood lumber industry is preparing to dig in for the long haul amid expectations that latest softwood lumber trade negations with the U.S. could be protracted, according to CBC News.

• Canada’s British Columbia Lumber Trade Council is preparing to step up pressure on its U.S. peers through a lobbying campaign in a bid to find a resolution to the ongoing dispute following the expiration of a softwood lumber trade deal between the two countries in 2015.

• The council, along with British Columbia’s Forests, Lands and Natural Resource Operations, is set to emphasize that the U.S. homebuilding industry relies on Canadian lumber and trade restrictions could increase costs. Meanwhile, American lumber industry groups are investigating allegations that Canadian suppliers are dumping product in the U.S.

Dive Insight:

Negotiations to revive the bilateral softwood lumber trade deal are gridlocked following demands by the U.S. to reduce Canada's market share to 22% over a four-year period. A one-year period during which neither country could file trade actions against the other expired in October.

Meanwhile, the U.S. International Trade Commission is exploring options for antidumping and countervailing duties on softwood lumber imports from Canada in response to allegations from U.S. producers that Canadian softwood lumber is being sold in the U.S. at below-market rates. A preliminary decision on countervailing duties is expected for later this month, followed by a determination on dumping this spring.

The dispute is among the most enduring between the U.S. and Canada. It came under greater focus during and after the U.S. housing market crash, as producers in both countries, but particularly in the U.S., reduced production capacity in response to a drop-off in demand from the homebuilding sector. As housing demand revives the need for more framing lumber, OSB and other engineered wood products, producers are slowly but surely returning capacity to their mills. In the interim, however, domestic production lags demand.

U.S. lumber industry leaders reported in November that imports of Canadian softwood lumber in the first eight months of 2016 were up 33% from the year-earlier period. According to CBC News, the Trump administration is reviewing the bilateral softwood lumber deal and its related contentions, which is likely to come up again with the ordered renegotiation of the North American Free Trade Agreement.

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