Let's make a deal

The Canadian government has suggested a way it might drop its major international trade case against the U.S. – with a softwood lumber deal.

The northern neighbour has filed a wide-ranging complaint to the World Trade Organization about the way the U.S. applies punitive tariffs, infuriating the Americans.

U.S. trade czar Robert Lighthizer today called it a massive attack on the American system of international trade, and warned that if Canada wins its case, it could lead to a flood of Chinese imports into the U.S. and actually squeeze out Canadian goods.

He made those remarks during a press conference at the end of a round of NAFTA talks.

Chrystia Freeland, Canada's foreign affairs minister, says the case is directly tied to softwood lumber, where the U.S. imposed duties, and that the solution is to sit down and negotiate a lumber deal — something she'd be happy to start right away.

A big challenge in reaching a softwood deal is that it's not entirely up to the governments of Canada and the U.S. As part of any deal, the American lumber industry would need to sign off on the right to sue Canada again for punitive duties — and there's no indication that's happening.

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