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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

`