THUNDER BAY – Here we go again. The U. S. Lumber Coalition is going after the Canadian softwood lumber manufacturers.
“The case of softwood lumber is a perfect illustration of how protectionism generally provides benefits for a small number of people while harming a majority,” points out Alexandre Moreau, Public Policy Analyst at the MEI and author of the publication.
American producers have long criticized Canada for lacking a market mechanism that is deemed appropriate for determining the level of royalties paid for timber harvested from public forests. Indeed, to respond to this criticism, Quebec and British Columbia have implemented public auction mechanisms.
“The fact that these two provinces have implemented market mechanisms to determine royalty levels should in theory allow them to avoid the possible imposition of tariffs by the United States,” adds Mr. Moreau.
The U.S. Lumber Coalition is welcoming a letter from 41 United States House Representatives supporting efforts to negotiate a new, stable, and sustainable Softwood Lumber Agreement to offset unfair Canadian lumber trade practices.
The letter, co-sponsored by Reps. DeFazio (D-OR) and Zinke (R-MT), states that border measures against subsidized and unfairly traded lumber imports are critical for the U.S. lumber industry because Canadian timber is heavily subsidized and sold or contracted at pennies on the dollar compared to the free market, competitive pricing of U.S. timber of comparable quality.
The House letter highlights that without an effective agreement to counter this subsidy, Canadian trade practices would yield ever increasing market shares for Canadian product and producers, displacing and harming U.S. manufacturers, mill workers, loggers, and many local businesses and jobs in their communities.
The letter underlines the importance of any new agreement being designed to maintain Canadian exports at or below an agreed U.S. market share, as the U.S. and Canadian governments have already agreed. The letter also expresses the Representative’s sense that the U.S. industry is unlikely to voluntarily give up its rights under current U.S. trade laws in return for an agreement that fails to meet this objective, and that short of an effective agreement, the U.S. industry may file petitions for relief to offset the inequitable advantages provided to its Canadian counterpart by government subsidies.
The Representatives commend the dedication and hard work of Unites States Trade Representative Froman and his team have put into negotiating a trade agreement that works for the men and women of our forestry industry and encourages continued efforts for an agreement that allows the U.S. timber industry to compete on a level playing field.
The U.S. lumber industry’s overarching goal is to restore an environment in which it can invest, grow to its natural size without being impaired by unfairly traded imports. This will allow the domestic industry to better supply the American market and help restore the thousands of jobs lost to unfair trade
