U.S., Canada to continue lumber trade talks as deadline passes

October 12, 2016 10:07 AM EDT

Canada's International Trade Minister Chrystia Freeland speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Canada, December 7 , 2015. REUTERS/Chris Wattie/File Photo

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WASHINGTON (Reuters) - The top U.S. and Canadian trade negotiators said on Wednesday they would continue talks toward a new trade agreement on softwood lumber, despite the expiration of a "standstill" period prohibiting legal challenges over the long-standing dispute.

U.S. producers complain that Canadian lumber is subsidized, and they have in the past launched trade challenges that resulted in the United States imposing billions of dollars in tariffs.

In a joint statement, U.S. Trade Representative Michael Froman and Canadian Minister of International Trade Chrystia Freeland said negotiators were meeting in Washington this week.

"In those negotiations, we will work to meet the mandate agreed to by President Barack Obama and Prime Minister Justin Trudeau when they met in Ottawa in June — a new agreement that is designed to maintain Canadian exports at or below an agreed-upon U.S. market share to be negotiated, with the stability, consistency and flexibility necessary to achieve the confidence of both industries," they said in a joint statement.

"The softwood lumber industry is a vital sector for both the United States and Canada," they added.

The most recent round of arguments ended with a 2006 deal that expired in October 2015. Both sides agreed to take no action for a year after that, but without a new treaty, U.S. firms have made clear they will file new damage claims.

Major Canadian lumber firms include Canfor Corp, West Fraser Timber Co, Interfor Corp and Resolute Forest Products Inc.

(Reporting by David Lawder in Washington and Andrea Hopkins in Ottawa; Editing by Chizu Nomiyama and Meredith Mazzilli)

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