Softwood Lumber
continued from page ten

While lumber can be shipped only under the
terms of the agreement, logs are subject to Cana-
dian export restrictions but no U.S. import duty.
Some B.C. producers, facing rising logging costs
and declining lumber prices, have found advan-
tage in log exports.

Raw log shipments from B.C. to the U.S.,
which fell as low as 101,000 cubic metres in 1997
and averaged just slightly over 300,000 from
1992 to 1998, rose to 994,000 cubic metres in
1999 and for 2000, estimates range from 1.8 mil-
lion to 2.4 million. Most of these were harvested
on private lands on Vancouver Island: companies
operating on these lands continue to lobby the
federal government to reduce current restric-

tions on log exports so that they might export
even more raw logs.

While provincial Crown lands exports are esti-
mated to be about 825,000 cubic metres for 2000,
private lands exports could be as high as 1.5 mil-
lion. (In other words, in 1999 private lands

Did You Know?

© Almost 90 percent of
Canada’s softwood lumber
exports go to the U.S.

e Exports to the U.S. have
not decreased under the
SLA, they have merely been
reallocated to non-covered
provinces.

e Exports from exempt
provinces increased by
59.9% between 1995-1999.

accounted for over 65 percent of exports but pro-
duced only 11.7 percent of the total harvest.) The
same firms have been pushing the federal gov-
ernment to lift restrictions on private lands
exports, a move I.W.A. Canada flatly opposes.

Many of these exported B.C. logs have helped
boost the output of sawmills in Oregon and
Washington.

Our logs help these mills increase their effi-
ciency and to withstand a growing domestic tim-
ber shortage.

This, in turn, helps depress U.S. lumber prices.

At the same time, ironically, lumber exports
from third countries enter the U.S. duty free.
Aided until very recently by a very low Euro, as
the currency of the European Union is called,
European exporters in particular have sharply
increased their U.S. sales.

The Softwood Lumber Agreement, then, has
unfortunate effects on the Canadian wood indus-
try. That’s why I.W.A. Canada has called on the
federal government to allow it to lapse when it
expired on March 31, 2001. We want fair, open
access to the U.S. market and a level playing
field for all Canadian lumber producers.

Discussions have already begun between
industry, labour, Canadian federal and provin-
cial governments and the U.S. administration.
American industry is forcefully pushing its case
against free and fair trade. i

The U.S. industry lobby continues to allege
that Canadian producers, who operate mainly on
Crown land owned by governments, are thereby
subsidized, giving them unfair advantage against
their U.S. competitors. In fact, most Canadian
firms are obliged to pay road building, silvicul-
tural and other costs that U.S. firms need not
pay. When all costs and revenues are considered,
net profits for U.S. South and comparable B.C.
Interior firms are not greatly different over the
business cycle. The real U.S. concern, it seems, is
about market share and price.

Although Canada has successfully defended
itself against similar charges in the past, the
current agreement was negotiated and urged on
government by industry leaders who feared the
impact of a proposed U.S. countervailing duty
action in the mid 1990's,

¢ Cedar lumber products, which have brought the highest return for Canadian forest companies,

There are some Canadian analysts who believe,
indeed, we have changed policies enough that we
might withstand another countervail action. The
stumpage rates we charge for our timber have
increased; we have taken steps to make timber
pricing more market responsive and we have
improved our forest management regime since
the last round of countervail in the early nineties.
Still a countervail process is extremely expen-
sive, stressful and uncertain of outcome: I.W.A.
Canada would prefer to avoid going through it
again if possible.

In the current discussions, I.W.A. Canada has
made it clear that we want free trade in manu-
factured wood products. Failing that, we will not
support another agreement that involves quotas;
nor do we want a deal that treats some compa-
nies, provinces, regions or countries differently
than others. This merely sets one group of work-
ers against others, U.S. vs. Canada, quota-hold-
ers vs. non-quota-holders and so on.

We are also opposed to any deal that gives in
to some companies’ demand for increased raw log
exports. Exporting logs, after all, is a short-
sighted ploy that eliminates existing Canadian
jobs and future job opportunities in manufactur-
ing and wood processing.

LW.A. Canada has also urged Canadian goy-
ernment trade officials to work with labour and
industry on both sides of the border to rectify the
unfair situation that allows third countries eas-
ier access to the U.S. market than Canadians
enjoy. We are working with American forest sec-
tor workers’ representatives and industry offi-
cials to develop trade arrangements and pro-
grams that would help us increase, overall, the
combined North American exports of manufac-
tured wood products.

1.W.A. Canada wants a thriving Canadian
wood industry. We have consistently called on
firms to invest in diversified markets, new prod-
ucts lines, increased value-added production,
intensive silviculture, better forest stewardship
and worker training and retraining.

We have called on governments to encourage
such investment through their timber manage-
ment, timber pricing, land tenure, industrial
development, workforce and forest zoning poli-

are also under potential sanction by the U.S. government. Pictured is a Local 363 member scaling
western red cedar at Menzies Bay, Vancouver Island. 7

cies. We have urged government and industry to
help maintain existing markets and develop new
ones. We encourage co-operation among Cana-
dian and American industry and unions to work
together to expand markets and diversify prod-
uct lines. Trade policy in general and our trad-
ing relation with the U.S. in particular are key
elements of a strategy toward a stable, secure
and sustainable wood industry.

OUR POSITION ON THE SLA:

e We want fair and open trade in manufac-

tured wood products - in other words, let
the SLA lapse.

e We will not support another agreement
that involves quotas or treats some
companies, provinces, regions or coun- —
tries differently than others.

e We are opposed to any agreement that
gives in to some companies’ demand for
increased raw log exports.

e We encourage cooperation between
labour & industry on both sides of the
border to develop to expand markets,
diversify product lines & increase the
combined North American export of
manufactured wood products.

© We believe trade policy & our trading
relationship with the United States in
particular are key elements of a strategy

toward a stable, secure & sustainable
wood industry.

a

LUMBERWORKER/April, 2001/11