B.C. lumber producers are still waiting for answers on the softwood lumber dispute in the wake of a visit to Vancouver by the newly appointed U.S. ambassador to Canada.

David Wilkins repeated a familiar refrain as he delivered a speech to the Vancouver Board of Trade and held separate meetings with executives from the Business Council of British Columbia (BCBC) and the province's forest industry last week.

He said Canada must negotiate rather than retaliate, after Canada won an extraordinary-challenge committee ruling by North American Free Trade Agreement (NAFTA) officials last month that calls for the lifting of U.S. softwood-lumber tariffs and the return of $5 billion in duties from Canadian producers since 2002.

"The comments he made (during the meeting with BCBC executives) were not that surprising to me," says Jock Finlayson, the BCBC's vice-president of policy and senior economist. "He is the U.S. ambassador and his job is to express the position of the U.S. government - and he did that."

David Wilkins U.S. ambassador to Canada

Finlayson declines to disclose details on his group's meeting with Wilkins, but adds the ambassador did not stray from his public comments on softwood lumber.

He says Wilkins is just one of many influential people on both sides of the border who can resolve the softwood lumber dispute, along with Canadian Ambassador to the U.S. Frank McKenna, provincial and federal government leaders, the U.S. Congress and White House.

Contrary to popular belief, says Finlayson, U.S. President George Bush is not to blame for the dispute - Congress is at the heart of it, he believes.

Depending on how many Democrats and Republicans are in office, and how many representatives vote with the Bush administration, Congress has the ability to override the president's wishes. As a result, says Finlayson, Bush only managed to push the Central American Free Trade Agreement through Congress by a single vote.

Unlike the U.S., Canada's provinces have control over natural resources, he adds - and as a result, the softwood lumber dispute is a lot more complicated than other Canada-U.S. trade disputes. More 90 per cent of goods, however, pass between the countries without any problems.

He echoes Wilkins' claim that softwood lumber is just one small portion of cross-border trade, and notes Canada sells a lot more goods to the U.S. than the U.S. sells to Canada. BCBC supports Canada's combined strategy of legal challenges and negotiation.

Canada broke off negotiations on a possible resolution with the U.S. earlier in the summer because of the Americans' refusal to recognize NAFTA rulings in Canada's favour.

U.S. trade officials have said they won't comply with the ruling, citing their compliance with an earlier World Trade Organization (WTO) decision on the same issue that supported the American position in favour of tariffs on Canadian lumber exports.

Canada is expected to appeal the WTO decision. Wilkins, who was appointed to replace outspoken former ambassador Paul Cellucci, said the legal challenges must stop before any resolution can be achieved.

"We have legitimate legal disputes," Wilkins told reporters after his speech. "You say NAFTA's ruling overrides the WTO ruling. I say it doesn't. The dispute continues, the legal argument continues and it never gets resolved. It needs to be negotiated."

Canada pulled out of negotiations after the U.S. ignored the NAFTA ruling. Wilkins said he could not say when the U.S. might seek a return to the bargaining table.

"Friends negotiate, they don't retaliate," said Wilkins during his speech to the Board of Trade. "I just want to keep that in perspective."

Contending the U.S. is still committed to NAFTA, he told business leaders to consider that softwood lumber accounts for a small portion, about $7 billion, of Canada's $129 billion trade surplus with the U.S.

One of the executives in the audience at the Board of Trade luncheon was Jim Shepherd, president and CEO of Canadian Forest Products Ltd. (Canfor), which is Canada's largest lumber producer and operates 29 mills in B.C., Alberta and Ontario.

Lee Coonfer, a spokesman for the company, says Shepherd believes Wilkins is sincere in his desire to bring a resolution to the dispute and has committed to learning the intricacies and politics involved.

But, says Coonfer, Shepherd also believes Wilkins will eventually side with the current U.S. position - while the company is committed to rules-based trading under NAFTA.

Wilkins said the U.S. is focused on assisting the victims of Hurricane Katrina before it resolves the softwood lumber dispute.

He praised all Canadians who have helped his country deal with the worst natural disaster in its history. "I simply say we are grateful, we appreciate you, we thank you and we will not forget what you did for us," said Wilkins.

A former South Carolina state legislator and house speaker, Wilkins served as the South Carolina chairman for Bush and Vice-President Dick Cheney during the last U.S. election.

The ambassador has spent much of his time travelling across Canada, visiting the Maritimes, Calgary and the Yukon, among other places.

He said he found Canadians' views of the U.S. are much more positive than they are perceived to be.

"I can only speak for my nine weeks here (as ambassador) and my nine weeks here tell me that the relationship is much stronger than people want us to believe, that there's a disconnect between what you read and hear in the media and what the people tell me on the street," said Wilkins.

Meanwhile, Wilkins drew applause as he announced the U.S. consulate in Vancouver will begin processing applications on E-1 investment visas for Canadians who do business south of the border.

The move, which takes affect Jan. 1, means Western Canadians no longer have to travel to Toronto to obtain such visas.

"Anything we can do for business people to do business in the U.S. is welcome," says BCBC's Finlayson.

(Monte Stewart can be reached at monte@businessedge.ca)