US talks but doesn’t
practice ‘free trade’

anada and the United States have had dis-

agreements and disputes over lumber exports

for generations now. In the 1930’s Canada

was hit with tariffs which took about 5 years

to beat back. In the 1960’s Canadian industry

faced the Lumberman’s Economic Survival
Committee, in the early 1980’s it faced the Northwest
Independent Forest Manufacturer's and today it faces yet
another battle with the Washington-based Coalition for
Fair Lumber Imports.

Time after time, U.S. lumber interests have done their
level best to limit market access for Canada-based
exporters. To a great extent, they have succeeded.

In the last five years, as U.S. housing markets have
been robust, American producers have been flooding their
own markets. Logs once destined for Japan and Asia are
being milled into lumber and have driven down world
lumber prices. U.S. lumber interests have filled domestic
market demand while freezing out lumber from B.C.,
Ontario, Quebec and Alberta during the five years of the
Canada-U.S. softwood lumber agrement.

While George Bush may talk the talk on free trade and
make speeches on tearing down trade barriers his admin-
istration is indebted to U.S. lumber interests that are dri-
ving the coalition. He also needs the votes of congressmen
and senators from timber states to get “fast-track” author-
ity to negotiate the much talked-about Free Trade Agree-
ment of the Americas.

“Free trade” is just rhetoric for the Americans. They
will talk about free trade in investment, in energy, in
water, in health care and other public services, or when it
suits their interests - but they will look the other way
when they can’t compete with a more modern and effi-
cient Canadian lumber industry,

We should call their efforts to block Canadian lumber
what it really is: “Corporate managed trade.”

Shame on TimberWest

The most brazen company has become even more
brazen. In the aftermath of its permanent closure of the
Cowichan Lumbermill in Youbou (see stories page 6) Tim-
berWest is boosting its log exports to the United States.

As its former employees, Local 1-80 members, maintain
a vigil at the Youbou mill, TimberWest does a conference
call with industry analysts to say it can profit from log
exports while the rest of the industry is uncertain over its
future.

And as Canadian millworkers are jobless, TimberWest
and Weyerhaeuser, another major private land holder in
B.C., lobby for the lifting of any restrictions on the export
of private logs.

‘TimberWest boasts of its flexibility to provide logs to
US. millers. It boasts of its flexibility to land logs in
Japan. But it doesn’t say much about what has happened
to millworkers at Youbou and it doesn’t tell analysts that
it is trying to walk away from the tree farm licence that
was tied to Youbou in order to maintain stability for forest
workers and their communities

TimberWest didn’t hold an conference for analysts on
the fact that it cuts some 2.4 million cubic meters on pri-
vate lands and has Crown harvesting rights of about 1.2
million cubic meters and has only one small-log mill.
That’s about 3.6 million cubic meters and enough timber
to run several mills. Youbou could run on one shift with
less than 500,000 cubic meters, less than 1/7th of the com-
pany’s timber production.

‘There’s something very wrong in this picture and Tim-
berWest’s actions are inexcusable. But what does it care?
It’s laughing all the way to the bank while workers and
their communities suffer the consequences.

TimberWest claims that things are looking up for it in
2001 while it has severed its workforce at Youbou.

Shame on TimberWest!

LUIMBERUORKER

Official publication of I.W.A. CANADA

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Oe HARVEY ARCAND . . 2nd Vice-President
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Vancouver, B.C. ‘TERRY SMITH... Secretary-Treasurer

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BROADWAY ay. PRINTERS LTD.

THE EFFECTS OF
SQUEAKING SOFTLY
AND CARRYING A
BIG STICK:

Lumber dispute is made for consolidation

Once you get past the piles
of accusations and counter
accusations flying back and
forth between the United
States and Canada over the
softwood lumber dispute,
one should simply look at
what is happening in the
industry — there is a con-
solidation going on and the
multinationals are looking
to rationalize and globalize
the industry even further.

In early March Bob Ple-
cas, president of the B.C.
Lumber Trade Council said
there is going to be an inte-
grated North American cor-
porate structure in the for-
est industry.

“At that point,” he said,
“companies will begin to inte-
grate all of their systems
and it will become a North
American zone of trade in
lumber.and forest products.”

Mr. Plecas is unlikely to
make a statement like this
if there were no substance
to it.

At the same time, listen
to Canfor president David
Emerson, leader of Canada’s
number one lumber pro-
ducer. Shortly after the U.S.
Coalition for Fair Lumber
Imports, the protectionist
lobby group backed by big
U.S. multinational money
(much of which is funnelled
through the American For-
est and Paper Association),
and which is fronting the
attack against Canada, Mr.
Emerson let loose.

He said that trade agree-
ments negotiated by Canada
are a failure. Emerson
believes that the drawn out
processes of appealing U.S.
countervails and/or dump-
ing decisions through the
North American Free Trade
Agreement trade panels and
onto the World Trade Orga-
nization, could drive some
forest companies in Canada
out of business.

“The risks for a small,
trade-dependent country
like Canada are truly fright-
ening,” said Emerson. “We
have developed a depen-
dency on the huge market
next door and then we are
slowly being crushed as the
vice tightens.”

Emerson pinpointed the
issue that punitive duties,
imposed by the U.S. govern-
ment, would weaken forest
companies in Canada and
make them more vulnerable

to U.S. takeover.

On April 2 Emerson was
candid in his remarks. He
said it’s virtually impossible
to have free trade with the
Americans.

“One thing is clear — they
are 10 times bigger than we
are, we are completely
dependent on them more
deeply than we should be
for our own economic health
and well-being,” he said.

Canfor is big in Canada,
but it’s small potatoes com-
pared to International
papel, Georgia Pacific, Wey-
erheuser and Louisiana
Pacific.

The facts are clear. As

Massachusetts Governor
Paul Cellucci, now the U.S.’s

Ambassador to Canada said,
the administration of presi-
dent George Bush, which
appears sided with the coali-
tion, is calling for “market-
based” timber reforms in
Canada. They don’t like the
fact that lumber is harvested
on Crown lands in Canada.
They think there should be
reforms and are pressuring
Canadian governments to
do that.

Then, as U.S. - based
multinationals continue to
run out of timber, Canada
would continue to be the
place to go for fibre, in the
same manner that Weyer-
haueser so easily purchased
MacMillan Bloedel. There is
probably nothing more that
Weyerhaueser and other
multinationals would like to
integrate into their North
American systems more than
private tenure which the
Bush administration is seek-
ing to promote.

In March International
Forest Products president
Duncan Davies, Mr. Emer-
son’s and Mr. Plecas’ col-
league and co-chair of the
B.C. Lumber Trade Council,
after announcing takeover
of Primex Forest Products
and before the announced
closure of Fraser Mills (see
story page three), said the
following: “As we look at the
coast, there is no question
there is going to be a ratio-
nalization of capacity and
changes in ownership.”

He also predicted cut
reductions, and tenure form.

“This is a national crisis
in the making,” said Emer-
son on April 1, saying that
even if the Americans only

put a 40% duty in place, com-
panies will die and jobs will
disappear in Canada. He’s
right.

A shrinking U.S. industry
needs a northern wood bas-
ket to maintain market
share over the long term. If
the Bush administration
plays hardball it could flat-
ten Canada’s forest industry
and the road to multina-
tional expansion in Canada
would be made all the more
easy.

In The Globe and Mail,
the I.W.A.’s own research

director Doug Smyth com-
mented on growing timber
shortages in the United
States.

“The U.S. is in a severe
timber shortage situation,”
he said. “They are almost
totally out of timber and
they are desperate.”

In the U.S. south overcut-
ting has pushed pine pro-
duction to its environmental
limits. Montana has over
cut drastically and govern-
ment forests in Idaho are
virtually shut down.

Harvest levels in the U.S.
south have doubled since
1980 to unsustainable lev-
els. In that same time period,

four of the largest giant com-
panies saw their proportion
of annual timber harvest
from national forests drop to
5% from 15%.

Canada has some 417 mil-
lion hectares of forests, about
94% of which are publicly
owned. The U.S. has about
half that forest base, most of
which is privately owned.

Vancouver Sun columnist
Ken Drushka observed, after
attending a conference on
the global forest industry in
Vancouver, that consolida-

-tion is considered the “Holy

Grail” amongst money man-
agers connected to forest
companies.

At the same PriceWater-
houseCoopers conference
Mark Connelly of the Credit
Suisse First Bank in Boston
spoke in favour of consolida-
tion in the industry, the cur-
tailment of production, and
the raising of prices.

Consolidation is coming
fast and some ofits key domi-
noes may be laying within
the softwood lumber dispute.

LUMBERWORKER/April, 2001/5