e IWA-Canada Mission delegates on the Cooperative Overseas Market Development
Program's European tour were (I. to r.) Keith Johnson, Special Labour Representative
(COMDP); Garry McCaw, of International Forest Products’ MacDonald Cedar
Division (Local 1-357); Jesse Mehat of Merril Wagner (Local 1-425); Philip Legg, [WA
Assistant Research Director; Stan McMaster of Slocan Forest Products (Local 1-405);
and: IWA National President Jack Munro.

COMDP completes
second phase

In early August, Keith Johnson,
the IWA-CANADA’s Special Labour
Representative within the Coopera-
tive Overseas Market Development
Program (C.O.M.D.P.), issued a
report on the results of the most
recent overseas marketing mission to
the United Kingdom and Europe. The
delegation included three worker rep-
resentatives from mills producing for
the U.K./Europe market; Gerry
McCaw, 1-357, International Forest
Products, MacDonald Cedar Divi-
sion, Stan McMaster, 1-405, Slocan
Forest Products, Slocan Division and
Jesse Mehat, 1-425, Weldwood of Can-
ada, Merrill and Wagner Division.
The group also included two industry
representatives, Keith Bennett, For-
est Industrial Relations and John
Fenton, Fletcher Challenge Canada
as well as three IWA-CANADA
national office representatives, Jack

© Mission delegates examine staircasing
made with cores of western hemlock at a
wholesale-retail distributers in Lapeyre
on the outskirts of Paris. Photo by Gary
McCaw.

Bee:

e In Bordeaux France, B.C. hemlock is remanufactured into specialized panel
products for the French market. Photo by Gary McCaw.

Munro, Keith Johnson and Phillip
Legg.

The outbound mission was the sec-
ond in a series of three market devel-
opment trips for which IWA-
CANADA has received funding sup-
port from the federal government’s
Western Economic Diversification
Office. The first outbound mission, to
Japan, was completed in November,
1988 and the third trip, to the U.S.
Atlantic coast market, will be com-
pleted in the fall of 1989.

The twenty page report was drafted
by mission delegates and details a
number of areas where industry and
government could do more to increase
the volume and value of the wood
products shipped to this market.

For mills operating on the B.C. coast
the major opportunity that delegates
felt needed to be developed was kiln
drying. Consumers in the U.K. and
Europe are becomingly increasingly
concerned about environmental issues
and, as a result, are beginning to
tighten the restrictions on anti-stain
chemical treatments such as penta-
chlorophenol (P.C.P.). Drying lumber
helps address the stain problem in a
way that consumers in Europe find
environmentally acceptable.

For BC. Interior mills there is a
major opportunity to increase the
value of their lumber shipments over-
seas by sorting out the tight-knotted
lodgepole pine from their Spruce-Pine-
Fir (S.P.F.) production runs. In the
U.K. market, the pine component
could be used in joinery applications,
(e.g. doors, windows and general cabi-
netry), a part of the market currently
serviced by Scandinavian producers.
With many of its characteristics sim-
ilar to Scandinavian red-wood, kiln-
dried lodgepole pine is well suited to

increase its share of’ the joinery
market.

The delegates also found that to
increase our market in Europe our

mills have to concentrate on produc-
tion of sizes, lengths and grades which
are not common in North America. For
example, many of the mill moderniza-
tions undertaken in B.C. over the last
decade have concentrated on shorter
length lumber (less than 20 feet) suit-
able for the North American market
while European customers are anx-
ious to buy longer lengths (more than
20 feet). To compete more effectively
against other wood products produc-
ing regions like Scandinavia, B.C.
mills have to be able to provide lum-
ber in one-foot increments as opposed
to the current North American prac-
tice of selling in two-foot increments.

Environmental concerns in the U.K.
and Europe are also having an indi-
rect impact on B.C.’s forest manage-
ment practices. Driven by a broad
base of public concern over the link
between the “green house effect” and
“de-forestation,” especially in regions
like the Amazon basin, distributors
and end-users of softwood products in
Europe want to be assured that these
products come from a forest resource
which is managed in an environmen-
tally sound and sustainable manner.

Concern about the “de-forestation”
issue has become so intense in Europe
that many countries have begun to
implement restrictions on the use of
hardwoods from these “de-forested”
regions. In Holland, for example, 40%
of the municipal governments have
already restricted the use of tropical
hardwoods in new construction.

pagh

e Pictured are workers at a joinery man-
ufacturing plant in Wednesbury, England
The labour intensive plant specializes in
doors and windows, some of which are

made with B.C. lodge pole pine. Photo by
Stan McMaster.

BC. mills are trying to fill the void
created by these restrictions. Western
hemlock, for example, is being
actively promoted as a decorative sub-
stitute for hardwoods. Although the
success of this promotional work has
been limited, most B.C. producers are
optimistic about the possibilities for
substantial improvements.

Other opportunities noted by the
mission members included specialty
plywood for use in truck panels and
concrete forming, western red cedar
for decorative panelling and exterior
siding and western hemlock for high-
value interior uses.

U.S. sides with Japan on tariff
against Canadian lumber

GENEVA, SWITZERLAND —
Canadian lumber products producers
lost out on a ruling from the Council
of the General Agreement on Tariffs
and Trades here on July 19. The rul-
ing, which upheld Japan’s right to
impose an 8% tax on Canadian Spruce
— Pine — Fir (SPF) dimension lum-
ber imports, was supported by Ameri-
can officials.

The ruling could put a damper on
the Canadian industry’s efforts to
expand its foothold in the Japanese
housing market.

Other countries at the GATT hear-
ing, including New Zealand, Aus-
tralia, Finland, India, and Brazil
backed Canada’s position. The Cana-
dians were arguing that SPF prod-
ucts are interchangeable and are
therefore “similar” to other building
products such as U.S. western hem-
lock.

Canada’s application was based on
the issue that American and Cana-
dian producers share the same con-
cept and classifications for “dimension
lumber” which is an industry term for
softwoods used in housing construc-
tion from 2x4’s to 2x10’s.

Japan successfully argued that
“dimension lumber” is not an interna-
tionally accepted concept used in:

international tariff classifications.
The panel ruled that the Canadian
concept of dimensional lumber is “not
an appropriate basis for examining
Canada’s claim of violation.”

However, the GATT panel did not
deal with the question of whether or
not Canadian SPF is a “similar prod-
uct” to the American hemlock used in
housing construction. The GATT
body normally bans discrimination
against similar products trade by
member nations.

Canadian officials from the Depart-
ment of External Affairs say they
may try to start further talks with the
Japanese or re-apply to the GATT
panel to examine the concept of dis-
cuminaneE against “similar pro-

lucts.

Tn its application, Canada claimed
tariff losses in excess of $90 million
between 1974-1987. If the tariffs
remain intact, industry now antici-
pates additional payments of over $55
million over the next five years.

Canada ships in excess of 200 mil-
lion board feet of SPF to Japan annu-
ally. B.C. interior kiln-dried products
in those categories are subject to the
discriminatory tax, even though the
building materials are perfectly inter-
changeable with similar American
kiln-dried products.

© Canadian lumber exporters lost a decision to remove Japanese tariffs against S.PF.
building products. In July, the Council of GATT in Geneva ruled against removal of an
8% duty on Canadian dimension lumber.

6/LUMBERWORKER/SEPTEMBER, 1989