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Canada's long-running war in the woods, which has spanned decades and involved bitter skirmishes in just about every area of the country, may be over for good.

Forest companies and environmentalists are poised to announce a historic truce Tuesday. The deal will not only stop the fighting, but will require the two sides to eventually do something once thought improbable: Tree huggers and tree cutters are to switch from being sworn enemies to something resembling partners.

Under the pact, environmental groups will suspend boycott campaigns directed against Canadian forest products companies, a major irritant to the industry. Meanwhile, forest companies will not undertake any environmentally unfriendly actions, such as logging in ecologically sensitive boreal forests inhabited by endangered caribou.

If the industry attains specified conservation performance goals, environmental groups will go beyond the truce and publicly help brand the Canadian industry's products as green. This will give the industry a marketing advantage against companies from countries that turn a blind eye to illegal harvesting and other harmful forestry practices.

The deal covers members of the Forest Products Association of Canada, the Ottawa-based trade group that includes most of the industry's big players, and such activist organizations as Greenpeace, the Canadian Parks and Wilderness Society and Forest Ethics, which has spent years publicly assailing members of the association, such as forestry giants AbitibiBowater Inc. and Weyerhaeuser Co. Ltd.

Given the high levels of mutual distrust, the deal has involved two years of intense negotiations aided by professional facilitators.

The talks have taken place during one of the worst periods on record for the industry. It has been beset by declining prices, mill closings and bankruptcies. These signs of stress are an indication Canadian producers are having difficulty competing on price alone against companies in countries like Brazil, which benefit from more modern mills, faster growing trees, and lower labour costs.

The decision to negotiate reflects that "the Canadian industry ... needed to figure out a way to compete going forward," said Bruce Lourie, president of the Ivey Foundation, an organization that along with the U.S.-based Pew Charitable Trusts has help finance forest preservation activities by many of the environmental groups involved in the deal.

Canadian producers do have some advantages, such as stronger wood fibres - one of the few benefits of having slower-growing trees - and a recognition that their forestry practices, while frequently criticized by environmentalists, are much further advanced than in many industrializing countries.

Canadian producers, for example, are legally required to regenerate with native species all trees they cut. Forestry plantations, another environmental taboo, are also rare in Canada. Meanwhile, many consumers have been insisting that any trees they buy be certified as being produced in ways that minimize harm to the environment, providing a possible advantage for companies with good conservation credentials.

"I think the Forest Products Association realized that Canada still has high-quality, strong wood fibre and that if we became a leader in sustainability we would have a competitive advantage over these other countries that clearly aren't very sustainable," Mr. Lourie said.

The association and environmental groups indicated they would not comment publicly until they jointly announce the deal.

The pact's most significant provision is an agreement for the industry to stop logging in about 30 million hectares of northern, boreal forest (a tract five times larger than Nova Scotia), for which it had been granted permission to cut. The set-aside action has been undertaken voluntarily by the industry and didn't have government involvement.

The area is prime caribou habitat, and its preservation has been a major objective of environmentalists in their campaigns against Canadian forest companies. Caribou are found predominantly in Canada's boreal, or northern forest, one of the world's last major intact tracts of wildernesses.

The industry has also agreed to become carbon neutral, so it will have no net emissions of greenhouse gases, the first time any sector has pledged to take such action anywhere the world. This will allow the industry to remove itself from the economic impacts of regulatory action to control emissions blamed for climate change.

Association members have already cut carbon emissions nearly 60 per cent since 1990, through such steps as using wood waste as fuel.

Although the industry has prided itself on its record of regenerating forests by planting trees, the pact will require companies to meet or exceed sustainability standards set by the Forest Stewardship Council (FSC), an international body that is considered the gold standard for certifying that woodlands are managed in a sustainable way. FSC requires loggers to respect the rights of indigenous people and to remove from production all areas deemed ecologically critical.

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