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