Max Baucus: “Instead I want to look to the future. I rise today to offer a true and lasting solution to what has become the world's…”

“Instead I want to look to the future. I rise today to offer a true and lasting solution to what has become the world's largest bilateral trade dispute and, by far, the largest fly in the ointment in the U.S.-Canada relationship. Given some political changes on both sides of the border, I believe it is now possible to negotiate a lasting and real agreement on the U.S.-Canada softwood lumber dispute. In 1986, at a similar juncture in a trade case, the U.S. and Canada agreed to resolve the dispute by allowing Canada to collect an export duty--a duty the United States would have otherwise collected. At the same time, Canadian provincial officials agreed to a set of forestry program reforms to eliminate the underlying subsidies. This arrangement broke down when Canada unilaterally--and without explanation--withdrew from the arrangement. But with some adjustments, a similar approach could be pursued to a real solution. The basic concept is simple. Once the final preliminary duty is known, Canada would agree to collect this on its exports and thus gain the revenue that would otherwise go to the U.S. treasury. The antidumping element complicates this understanding, but it could be addressed through a minimum export price or a duty adjustment to account for the dumping. Once the basic export duty rate was set, both sides would agree that the duty would be lowered as Canadian provinces eliminated subsidies.”