MONTREAL -- Trade Minister Pierre Pettigrew said yesterday any softwood lumber deal with the United States must include repayment of the $1-billion in punitive duties collected by the United States since last year.
"The $1-billion [paid] to the U.S. will be part of the negotiations, clearly," Mr. Pettigrew said at a news conference.
"This is money that was not collected correctly. It should come back to the Canadian companies," he said after meeting with his provincial counterparts to review trade issues.
U.S. Commerce undersecretary Grant Aldonas acknowledged Thursday that the most contentious issue in bargaining is the fate of the $1-billion in duties.
"The industries have staked out some hard positions on that," he said in a telephone conference call.
Canadian producers insist the duties must be returned, as they were after previous lumber disputes.
The United States hit Canada last year with duties totalling 27 per cent on Canadian softwood lumber exports, alleging that Canada heavily subsidizes its lumber and has been selling it too cheaply in the market south of the border.
Mr. Pettigrew agreed with Mr. Aldonas's assessment that the talks are progressing well.
"There is a rapprochement of positions," he said, adding he believes Mr. Aldonas has "some margins of flexibility that are really worth exploring at this time."
He said Canada is willing to entertain the idea of a temporary export tax on Canadian softwood lumber that would be phased out as the provinces move to better align their stumpage practices with market forces.
The tax would replace the current duties but there is no agreement on how to implement it or how high it would be.
The two sides agree, however, that it would fluctuate with the price of lumber and the pace of reforms by the provinces.
Meanwhile, about 100 anti-globalization protesters blockaded the entrance to the downtown hotel where Mr. Pettigrew met with his provincial counterparts.
The protesters said Mr. Pettigrew cannot be trusted to negotiate bilateral and multilateral trade treaties because he is beholden to global corporate interests keen on making inroads in such public sectors as education and health.
"I think he's basically a corporate sellout. He doesn't represent the people's views," said Eric Squire of the Solidarity Network to Stop the Free Trade Area of the Americas.
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