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Lumber dominates U.S.-Canada trade meeting Tuesday, February 27, 2001 By Doug Palmer Canada and the United States are trying to head off a potential dispute over softwood lumber trade, the Canadian trade minister said Monday. "That is, for both of us, the one issue we need to focus on," Canadian International Trade Minister Pierre Pettigrew said after a four-hour meeting with new U.S. Trade Representative Robert Zoellick. The trade officials also discussed a long list of bilateral spats and the desire of both countries for a new round of world trade talks. A five-year pact setting quotas and export duties on Canadian softwood lumber shipments to the United States expires on March 31 and the Bush administration is under pressure from leading members of Congress to negotiate a new agreement. Canada wants to move to free trade in lumber and flatly rejects the charge made by U.S. lumber interests that it subsidizes forest production by undercharging Canadian firms to cut timber on public lands. "The ambassador was very candid and frank and he expressed to me the pressure he's under," Pettigrew said. "I asserted our Canadian position, which is that Canadian forest practices are not subsidized." Canada again raised the idea of a top-level meeting to examine the issue and make nonbinding recommendations on how to proceed. No decisions were reached, but officials from both countries will meet again Tuesday, Pettigrew said. On another issue, Pettigrew said both countries pledged "to move expeditiously" to resolve a 4-month-old potato dispute. Prince Edward Island potato growers have been angered by U.S. conditions for resuming imports after a rare fungus was found on some of the spuds in the Canadian province. The two countries also discussed Canadian plans to impose countervailing duties on U.S. corn imports, as well as an ongoing U.S. investigation into the marketing and pricing practices of the Canadian Wheat Board. There was "a lot of tough positioning on both sides" during the meeting, which also touched on dairy and sweetener trade, Pettigrew said. The two trade ministers also discussed a possible "Quad meeting," which would include the EU and Japan, to propel efforts to launch a new round of world trade talks. Pettigrew said he supported such a meeting and Zoellick expressed "some openness" to the idea. "But it will take a lot more than the Quad" to get a new World Trade Organization round started, Pettigrew said, noting the desire of developing countries for more time to implement the terms of the 1994 Uruguay Round trade pact. Pettigrew said he was sympathetic to many of the developing countries' concerns.

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