The last SLA expired in 2015, over seven years ago, and in that time, every link in the lumber supply chain has had to confront escalating prices for this commodity. Even with the recent interest hikes, are still well above softwood lumber prices in 2015. Additionally, the numerous antidumping and countervailing duty orders issued in that timeframe have served to create an uncertain business environment for producers and consumers of lumber building materials.  

While prices for softwood lumber are now approaching their pre-pandemic levels due primarily to interest rate increases and resulting housing start declines, action on a new SLA remains critical. Inflation and supply chain challenges throughout the economy continue to persist. A new, meaningful agreement forged with our trading partner to the North would serve as a stabilizing influence within the housing, construction and building materials dealer sectors.  

�������ý continues to work with our Congressional partners to put pressure on the United States Trade Representative’s (USTR) Office regarding a new SLA. We are also working with USTR staff to push these negotiations forward.

Read more about the SLA.

The SLA dispute between the United States and Canada is one of the longest running trade disputes, starting in 1982 with the most recent agreement having expired in 2015. We are now in the midst of negotiating the fifth agreement, and that negotiation began three years ago. The expired agreement, which was settled in 2006 with 27 pieces of litigation, saw the first involvement of counter-veiling and anti-dumping laws.

Why We Need a SLA

The volatility of lumber prices and rapidly escalating building costs threaten the viability of affordable housing developments and all residential and commercial projects. The instability without an SLA means prices will continue to rise, causing further disruption to the housing market, project delays, and potentially the stoppage of projects altogether. A new agreement will help stabilize the market, promote affordable housing, and benefit both the LBM and construction industries across the country.

Therefore, �������ý strongly supports, and is actively pushing for, a new agreement that brings stability and predictability to the pricing and availability of softwood lumber.

It is critical that the Biden administration move immediately to negotiate a new SLA with Canada that will end lumber tariffs. At the end of 2021, the deal with the United Kingdom to lift steel and aluminum tariffs imposed by former President Donald Trump in 2018 was announced. A new SLA needs to be prioritized in the same fashion. So, what is �������ý doing to make sure this issue is noticed and addressed?

What is �������ý Doing?

In November 2021, �������ý to Secretary Gina Raimondo opposing the Department of Commerce’s (DOC) proposal to increase the tariffs on Canadian lumber shipments from 9% to 17.9% and called for a renewed urgency towards reaching a long-term SLA. But when nothing budged, �������ý signed on to an .

�������ý was successful with this opposition when in February 2022 the DOC announced reducing counter-vailing and anti-dumping duties to 11.64%. But �������ý had more work to do regarding the establishment of an SLA.

During �������ý’s inaugural Advocacy Week in April 2022, �������ý members and staff plugged it in our discussions with legislators and their staffers. But more importantly, �������ý staff followed up on those discussions.

That follow-up, which was strengthened by the connections �������ý established during Advocacy Week, led to a meeting with Senator Susan Collins of Maine. Senator Collins is a long-time advocate for our industry and is a key legislator in establishing a new SLA. In August 2021, Senator Collins spoke with Secretary Raimondo regarding the issue.

But before its meeting with Senator Collins, �������ý met with the DOC. During this meeting, �������ý learned that the U.S. and Canada were close to restoring an agreement in 2015 with Secretary Ross and our Canadian counterparts, but nothing ever came of it. According to the DOC, Canada has been unwilling to come to the table since. At this meeting, �������ý also learned that the best agency to target is the United States Trade Representative (USTR). So, that’s what �������ý did.

�������ý met with staff from USTR on June 9 and August 30. During its August meeting, �������ý learned that the USTR is not actively negotiating with Canada and that most recent discussions have revolved around composing panels (see below). More concerningly, �������ý learned that the U.S. Softwood Lumber Coalition, another key player, seems fine with the status quo. USTR needs support from this coalition to be effective in negotiating a new SLA.

How To Establish a SLA

To negotiate a proper agreement, there must be two five-person panels consisting of both U.S. and Canadian representatives: One regarding counter-veiling and another for anti-dumping. There are currently four out of five members appointed to the counter-veiling panel but there is no panel for anti-dumping, therefore the status falls as incomplete. To complete a panel, both the U.S. and Canada nominate members. If they cannot come to an agreement on who sits on each five-person panel, a coin is flipped to decide who receives 3-2 representation.

�������ý has been on the forefront of renewing a SLA with Canada. It will continue to work with its contacts at the DOC and Senator Collins’ office, as well as continue to educate legislators on the priority issue. �������ý also plans to work with the U.S. Softwood Lumber Coalition and is drafting a letter for Senator Collins and her colleagues to send to Ambassador Katherine Tai. We will be sure to keep you posted on the status of �������ý’s efforts and the fate of a new SLA.

On Tuesday, �������ý met with lead staff at the United States Trade Representative (USTR) to discuss the current state of play regarding negotiations to forge a new Softwood Lumber Agreement (SLA) with Canada. In short, USTR reaffirmed what we heard from the Department of Commerce (DOC) earlier this year – that negotiations are at a standstill. While public pronouncements from Canadian political leadership suggest a desire to come to the table, staff indicates that their counterparts north of the border are not serious about having a substantive dialogue. One positive takeaway that we did glean from the conversation is that there has been progress on identifying participants to serve on a binational panel that will review anti-dumping and countervailing duty issues between the two countries. Formation of this panel and subsequent review of softwood trade issues could set the table for serious discussion around a new agreement. Trade panels are a holdover from the North American Free Trade Agreement’s (NAFTA) Chapter 19, which stipulated that Canada and the United States would set up trade panels to settle disputes. The US Mexico Canada Agreement (USMCA), which superseded NAFTA, retains this appeal process.

One other variable that was noted is that the U.S. Softwood Lumber Coalition—which represents U.S. lumber manufacturers—is not particularly motivated to advocate for renewal of the SLA. Since expiration of the SLA in 2015, the domestic industry has consistently prevailed in administrative reviews by the DOC to keep in place tariffs on Canadian lumber entering the U.S. market. The most recent was on August 4 when Commerce issued the final results of the third administrative reviews of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada. Going forward, the new combined rate that will apply to exports from companies that are subject to the third administrative reviews is 8.59%. The current combined rate for most companies is 17.91%.

In its official statement on trade with Canada, the Coalition had this to say: “The U.S. Lumber Coalition supports the continued enforcement of the U.S. trade laws to strengthen domestic supply chains by allowing American companies to invest and increase the overall supply of made-in-America lumber and will continue to aggressively pursue the enforcement of the trade laws.

The U.S. industry remains open to a new U.S.–Canada softwood lumber trade agreement if and when Canada can demonstrate that it is serious about negotiations for an agreement that addresses Canada’s unfair trade practices which are harming U.S. producers, workers, and timberland holders. Until then, the U.S. Lumber Coalition fully supports the continued strong enforcement of the U.S. trade laws to address Canada’s unfair softwood lumber trade practices.”

On a final note, we did learn that there are ongoing staffing changes at USTR and there will be a new team in place shortly to lead USTR’s efforts on trade issues with Canada. �������ý will stay close to developments on this issue and will be reaching out to the U.S. Lumber Coalition to ascertain its plans for action in this space.

U.S. Forest Service – Wood Building Products Critical for Carbon Storage

On August 22, the U.S. Forest Service published an article extolling the virtues of wood building materials as a critical tool for storing atmospheric carbon. The article may be found and the technical study that it references may be found .

The bottom line is it reaffirms what we have known for some time—that trees absorb atmospheric carbon during their growth cycle and that carbon is sequestered for generations in the built environment. This is an interesting quote from the study’s abstract: “Because wood products store carbon for many decades, and because wood can replace carbon-intensive materials such as steel and concrete in construction, the forest products sector can play an important role in mitigating net carbon emissions.”

Another interesting take away from this piece is the Forest Service acknowledging that “houses store so much carbon that figuring out how many houses will be built in the future is important for understanding the total U.S. carbon storage capacity.” As Congress begins to turn its attention to writing the next Farm Bill which expires in 2023, greenhouse gas mitigation and the role forests and wood products can play in delivering natural climate solutions is going to be a major focus.

Ways and Means staff have expressed some concerns about proper application of the tax credits in the Strengthen Supply Chains Through Truck Driver Incentives Act (HR7348). Pat is going to have a follow-up meeting with them to find out more details about staff concerns, as well as suggest a form from the employer certifying that the driver meets the eligibility criteria, similar to the certification the ACA required for health insurance.

�������ý is also working hard on the issue of the expired Softwood Lumber Agreement. We are working with Senator Collins’s office on getting a Congressional sign-on letter drafted that would go to the USTR, who we have a meeting with next week. Be on the lookout for a grassroots call to action in October – 7 years since the last SLA expired – to send a letter to Ambassador Katherine Tai urging her to make negotiating a new SLA a top priority.

As of this month, �������ý is closing out its first year of federal advocacy and it has been a busy one. We have conducted 8 grassroots campaigns since last September and sent more than 1,400 messages to about 130 members of Congress. We have also had meetings with multiple regulatory agencies and legislative offices. For a full recap of our first year, be sure to check out the September issue of NRLA’s Lumber Cooperator.

For the last weeks of summer and into the fall, �������ý members continue to host their federal legislators at their yards for a Yard Tour. If you are interested in hosting your federal representatives, please contact the Legislative and Regulatory Coordinator Julianna Rauf at jrauf@abmalliance.org.

The most recent SLA expired in 2015. The lack of an agreement is contributing to the country’s rising and unpredictable lumber prices via high US tariffs, which in turn are contributing to affordable housing issues and fewer Canadian exports.

Richard Willard of Hammond Lumber Company in Bellgrade, Maine, explained, “pricing fluctuations (for lumber) have been dramatic over the past year and a half. Supply has also been an issue at times. Pricing stability has been a real struggle and a Canadian Softwood Lumber Agreement would help settle that.”  

Senator Collins, who is a big advocate for a new SLA, explained how she has been actively working on this issue and agrees that it worked well for both sides when it was in place. Sen. Collins also sees this as an issue for affordable housing. If there is not stability or predictability in the cost of building supplies, it is not possible to build affordable housing, which Maine and our nation desperately need.

The Senator said she would continue to push the Biden administration to negotiate a new SLA.

�������ý will continue to work closely with Senator Collins and will put pressure on USTR Ambassador Katherine Tai and Secretary of Commerce Gina Raimondo, to make a new SLA a priority.

Why do we need the Softwood Lumber Agreement?

Without an agreement, Canadian lumber is much cheaper than US lumber given the differences in stumpage fees in each country (governed by law in Canada, governed by the market in the U.S.). Thus, Canada can flood the U.S. market with cheaper lumber. However, without an SLA, the federal government imposes high tariffs on Canadian lumber, which drastically drives up the price of lumber and construction in the U.S. A SLA imposes import fees on Canadian lumber to put pricing on par with U.S. lumber prices, leveling the playing field.

About �������ý

�������ý, established in August 2021, is a committee of unified voices advocating on behalf of the lumber and building materials (LBM) industry at the federal level. �������ý currently represents LBM dealers and associated businesses in Alabama, Connecticut, Delaware, Georgia, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, Vermont, and Washington, D.C. The mission of the �������ý is to advance, shape, and influence policy in all branches of government. We work directly with members of Congress, the White House, and federal agencies to impact the legislative and regulatory process as it affects the LBM industry. �������ý is powered by the NRLA and Construction Suppliers Association (CSA).

In an effort to follow up on our Advocacy Week priority issues and continue to drive our message home, it is important to follow up virtual meetings with in-person events. Therefore, �������ý will be scheduling District Office visits. If you’re interested in participating, please sign up here.

Regarding in-person events, �������ý is also scheduling Congressional yard tours. Yard tours provide �������ý members an excellent opportunity to build and grow existing relationships with policymakers. They are a critical tool that take on added importance to augment our virtual meetings that were held across the NRLA and CSA regions during the legislative session. If you’re interested in hosting a yard tour, please sign up here.

The committee recapped �������ý’s meeting with the Employment and Training Administration (ETA) and their meeting on Softwood Lumber. Please click the links to be re-directed to detailed information on those meetings.

New business unfolded with the bittersweet news that Director of Legislative & Regulatory Affairs for both �������ý and NRLA Kirk Ives is departing. �������ý’s launch would not have been possible without Kirk. While we are excited to see him seize a new opportunity, it is no secret Kirk will be sorely missed.

Lastly, Sara Belletete posed the grading issue of SPF (spruce-pine-fir from Canada) vs. SPFs (spruce-pine-fir from the U.S. south) in front of the committee to gauge interest and see if its an issue worth pursuing.

The �������ý Legislative Committee’s next scheduled meeting is Thursday, May 26, 2022 at 11am.

According to Scott McBride, a lawyer on Majerus’s team specializing in LBM, a SLA was first introduced in 1986. We are now in the midst of negotiating the fifth agreement, and that negotiation began three years ago. The expired agreement, which was settled in 2006 with 27 pieces of litigation, saw the first involvement of counter-veiling and anti-dumping laws.

While the U.S. and Canada were close to restoring an agreement in 2015 with Secretary Ross and our Canadian counterparts, nothing ever came of it. According to Majerus, Canada has been unwilling to come to the table since. He stated that the U.S. has significant concerns with Canada’s general trade practices.

“This issue goes beyond just the LBM industry,” exclaimed Matt Semonik, �������ý Legislative Committee Member and President of the Rhode Island Lumber and Building Materials Dealers Association (RILBMDA). “It trickles down and affects consumers on a daily basis.”

To negotiate a proper agreement, there must be two five-person panels consisting of both U.S. and Canadian representatives: One regarding counter-veiling and another for anti-dumping. The counter-veiling panel has four out of five members and there is no panel for anti-dumping, therefore the status falls as incomplete. To complete a panel, both the U.S. and Canada nominate members. If they cannot come to an agreement on who sits on each five-person panel, a coin is flipped to decide who receives 3-2 representation.

In an effort to restore relations with Canada, �������ý has already taken action to oppose softwood tariff hikes and renew a SLA. You can read more by clicking on the below:

• �������ý Opposes Softwood Tariff Hike
• Commerce Reduces Canadian Lumber Tariffs

�������ý’s next steps for implementing the restoration of a SLA are to target the U.S. Trade Representative (USTR) and set up meetings with key legislators. �������ý will continue to update its members on that status of SLA efforts and make a new agreement a top priority.