Globalization of the sawn softwood sector continues as we ride the crest of the wave, characterized by generally positive markets worldwide. In North America, market conditions for sawn softwood are booming, fuelled by a robust housing sector; however, the ongoing trade dispute between the United States and Canada is dampening this generally positive outlook. The mountain pine beetle epidemic that rages in British Columbia, Canada continues, with approximately 4.8 million hectares of forestland currently infested and government policies regarding harvesting approaches being enacted as rapidly as possible. Demand for sawn softwood in the increasingly important Chinese market continues to grow, providing market opportunities for exporters of both sawnwood products and logs. Japanese sawn softwood consumption increased in 2003 for the first time since 1995 because of short-term increases in housing starts: European sawnwood exports to Japan reached record levels in 2003. Markets for sawn softwood in Europe remain strong and Nordic producers fared well in 2003, particularly Sweden, whose sawnwood output neared record levels of 17 million m3, in spite of increased competition from Russia and the Baltic countries and due largely to increased marketing efforts in the United Kingdom. The eastern European countries and Russia continue to re-define the global marketplace for sawn softwood, as foreign investments in these regions all along the forestry supply chain ramp up their ability to compete worldwide. A United States government ban on CCA-treated sawnwood in residential applications goes into effect in 2004, leaving wood preservers to seek alternative wood preserving solutions. The outlook for sawn softwood markets in 2004 is being impacted by the interplay of lower housing demand, increased roundwood supplies and a weaker US dollar. Based on historical trends, it is possible that higher North American prices for sawn softwood could still prevail through the first quarter of 2005, followed by a return to more normal pricing.