The U.S. and Canada are set to sign an agreement today to end the long-running dispute over softwood lumber. A negotiated settlement beats wasting more money on lawyers' fees, but it won't be the end of the issue.
Under the deal, legal proceedings would be dropped and the U.S. would repay about 80 percent of the duties it has collected on Canadian lumber imported into the U.S. Instead, Canadian exporters would have a quota that is linked to their market share in the U.S.
A move to alleviate a key source of trade friction between the U.S. and Canada is big news. Unfortunately the agreement won't solve the underlying problem because Canada has abundant low-cost government-owned trees and U.S. consumers demand inexpensive wood.
There is still significant opposition to the deal, which would be open for renegotiation within a couple of years. Canada has won a string of judgements under the NAFTA and WTO tribunals and many Canadians resent caving in to the U.S. It also still needs to be ratified by parliament, where it's part of a larger political-power struggle.