U.S., Canada Move to End Lumber Dispute

Negotiations between the United States and Canada to end a multibillion-dollar brawl over lumber trade moved forward as the countries swapped proposals for a new tax to control wood shipments, sources close to the talks said.

With a self-imposed Thursday deadline for a deal fast approaching, the two governments were expected to have continued negotiations through the weekend.

The trade dispute has become such an irritant in U.S.-Canadian relations that it was discussed at length during a recent White House meeting between President Bush and Canadian Prime Minister Jean Chretien.

The U.S. has accused Canada of unfairly subsidizing the sale of about $6 billion of wood shipped to the U.S. each year, about one-third of the U.S. market.

As a result, preliminary duties averaging about 32% were approved by the Commerce Department last year.

Canada denies the charges. But hoping to end the duties and continued uncertainty over the lucrative U.S. market for wood used in home building, Canada has been looking for a deal.

Both sides are hoping to wrap up their talks within the next few days, before Thursday’s deadline for a final decision by the Commerce Department on the punitive duties.