With B.C.’s billion-dollar softwood lumber business on the line, the province has been closely watching talks this week between U.S. President Barack Obama and Prime Minister Justin Trudeau – although a new trade deal remains elusive.

The two leaders released a statement following their discussions on Wednesday that said the two nations had made important progress in negotiations, but significant differences remain. The trade pact expired last year.

“British Columbia appreciates that the federal government continues to make finding a negotiated solution to Canada-U.S. lumber trade a top priority,” Forests Minister Steve Thomson said. “I am heartened to see that both Prime Minister Trudeau and President Obama have committed to maintain an intensive pace of engagement with a view to exploring approaches to achieve a mutually acceptable agreement by this fall.

“The two leaders have also recognized the need for regional provisions and flexibility in any negotiated agreement. We remain hopeful that an equitable agreement will be reached that will provide stability and business certainty for lumber producers on both sides of the border.”

Thomson said a managed trade agreement is preferable to U.S. trade action, which would be disruptive and costly for lumber producers, for Canada as a whole and ultimately harm U.S. consumers.

“If a reasonable negotiated settlement can not be reached, B.C. is confident that, working with the federal government, it will successfully defend its market-based forest policies against any U.S. trade action brought by the U.S. against Canada, as it has done in the past.”

The United States is B.C.’s largest market for softwood lumber products, with annual lumber exports of about $3 billion.