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Viewing cable 03OTTAWA1765, SOFTWOOD LUMBER: CANADIAN REACTIONS TO USDOC

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Reference ID Created Released Classification Origin
03OTTAWA1765 2003-06-23 12:41 2011-04-28 00:00 UNCLASSIFIED Embassy Ottawa
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS OTTAWA 001765 
 
SIPDIS 
 
STATE FOR EB/TPP/BTA AND WHA/CAN 
 
DEPT PASS USTR - MELLE 
 
COMMERCE FOR 4320/MAC/WH/ON/OIA/BENDER AND 
ITA/IA/TERPSTRA 
 
E.O. 12958: N/A 
TAGS: ETRD PREL CA
SUBJECT:  SOFTWOOD LUMBER:  CANADIAN REACTIONS TO USDOC 
       POLICY BULLETIN 
 
REF:  02 OTTAWA 844 
 
1. SUMMARY:  Canadian reactions to the USDOC policy 
bulletin on softwood lumber, which was released by 
Undersecretary Grant Aldonas on June 18, were mildly 
positive except in Quebec where there was broad 
disappointment that the section concerning that 
province was excluded from the document.  Whatever 
reactions may emerge, nothing in the bulletin can have 
come as a surprise given the extensive process that 
generated it, and there is currently no alternative 
"exit strategy" from the dispute.  END SUMMARY. 
 
2.   In March 2002 (reftel), when USDOC imposed anti-dumping 
and countervailing duties on softwood lumber from Canada, 
Mission Canada witnessed some of the strongest criticism of 
U.S. trade policy in a decade.  The fact that the release of 
the policy bulletin made scarcely a ripple in the media 
shows just how much the political temperature around this 
issue has cooled.  Yet the economic stakes are as high as 
ever.  Indeed, on June 20 two major Quebec-based players, 
Domtar and Tembec, announced a restructuring of their money- 
losing mills in Eastern Canada (this announcement was 
reported without mention of the policy bulletin). 
 
3.    Quebec business and political players expressed 
disappointment that their province was not covered by the 
bulletin, and focused on responding to this situation, which 
press commentators interpreted as threatening to isolate 
Quebec from other provinces in negotiations with U.S. 
interests.  Quebec Forest Industry Council head Georges 
Courteau said Quebec "must pursue talks with with a set of 
new ideas to put on the table."  Quebec Natural Resources 
Minister Sam Hamad said the province would make use of the 
comment period to submit further explanation of Quebec's 
practices. 
 
4.   Representatives of integrated, western-based producer 
Weyerhaeuser Canada, when interviewed the day before 
publication, were supportive of the policy bulletin process, 
and said they also support the use of interim measures for 
up to two years or so provided they are part of an "exit 
strategy" leading to a permanent solution. 
 
5.   B.C. Lumber Trade Council President John Allan was 
quoted calling the bulletin "a significant step" and said he 
was "pretty confident we can show the Americans we've got 
market-based policy reform in B.C."  "Obviously we are 
pleased it has come out," Allan said.  "By and large it is 
consistent with our understanding on what we have discussed 
with the U.S."  Allan was quoted saying that the interim 
aspects of U.S. proposals for resolving the dispute are 
more problematic, and also that while he did not like the 
numbers in the U.S. proposal, it could be enough to get both 
sides back to the negotiating table in coming weeks. 
 
6. B.C. Forests Minister Mike De Jong portrayed the bulletin 
as a necessary step.  "For the first time we are seeing from 
the U.S. federal administration a clear acceptance of the 
notion that we need to establish in clear terms the rules 
upon which we are going to get off this trade dispute 
treadmill.  That has been a fundamental objective of ours in 
British Columbia from the outset." 
 
CELLUCCI