Ottawa, August 7, 2007 - The United States' decision to terminate negotiations and take Canada to court is further proof that the Conservative government's Softwood Lumber Agreement is a failure, says Liberal International Trade Critic Navdeep Bains.

"The Conservatives have repeatedly said that the softwood lumber deal was better than litigation," said Mr. Bains. "Yet we now hear that the U.S. is taking Canada to court."

The Softwood Lumber Agreement signed by the Conservatives abandons Canada's long-held position that our softwood industry is not subsidized - a position upheld by trade panels at both NAFTA and the World Trade Organization. It also destroys the credibility of the dispute resolution provisions of NAFTA.

Now, the American government is taking its complaint to the London Court of International Arbitration for a winner-take-all hearing that is not subject to any appeal where Canada's ability to assist hard-hit forestry communities and workers could be jeopardized

"Thanks to a bad deal that left $500 million in the hands of the American lumber industry to fund legal and political attacks against the Canadian industry we are facing a situation where Canada's ability to assist its forestry sector could be curtailed by a court in London with no possibility to appeal the decision," said Mr. Bains.

"It is now time for the Conservatives to admit what the Liberal Party has been saying since the deal was first announced last year: that their deal is flawed and that it has solved nothing," said Mr. Bains.