Canada-U.S. Lumber Dispute: Lobby Threatens To Thwart Canada In Trade Deal

Posted: 04/11/2012 4:49 pm Updated: 04/11/2012 8:29 pm

VANCOUVER - The powerful softwood lumber lobby in the United States is suggesting it could thwart Canada's efforts to join a Pacific free trade zone if its neighbour refuses to address long-standing irritants.

Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, said the Trans-Pacific Partnership agreement negotiations could provide a chance to "make some progress on this file."

The agreement talks offer a new chance to address complaints that the lobby group hasn't had solved to its satisfaction under the U.S.-Canada softwood lumber agreement or NAFTA, he said.

"It provides an opportunity," van Heyningen said in an interview during a visit to Vancouver.

The Trans-Pacific Partnership agreement — or TPP — is a proposed tariff-free zone that would include more than 500 million consumers from nine countries, including Australia, Malaysia, Vietnam, Singapore and Chile.

Canada wants in, but its system of supply-management of eggs, milk and other farm products is seen as a stumbling block to participation in the new free-trade zone.

In a meeting with U.S. President Barrack Obama earlier this month, Prime Minister Stephen Harper did not answer a direct question on whether he was prepared to abandon the marketing boards, but said his government would do what is needed to protect industries.

The coalition has long seen Canada's pricing and marketing of softwood as policies that allow Canadian producers to dump into the U.S. market and harm the U.S. industry. It wants softwood added to the TPP discussion, along with eggs and milk.

David Yocis, a coalition lawyer, said his group alone can't block Canada from getting into the TPP.

But he suggested the coalition's support could move things along toward ratification of the deal and conversely, coalition opposition could slow things down.

"At the end of the day, this agreement would have to be ratified by the U.S. Congress. So if, at the end of the day, this negotiation makes progress on issues that we care about, then that makes it more likely that we would support that agreement and support it being passed through Congress," Yocis said.

"In the U.S., that's how you get coalitions for trade agreements. If there are enough industries who feel they are getting something out of this deal and there is a large enough coalition that supports it, then it passes Congress easily. That's the political reality of how that works in the U.S."

Earlier this year, the two countries agreed to a two-year extension of the 2006 Softwood Lumber Agreement, meaning the deal will now expire in October 2015.

But despite the agreement, the two countries continue to battle out differences. Late last year, the U.S. coalition launched another grievance, saying B.C. is exaggerating the damage from the mountain pine beetle infestation to reduce stumpage fees.

The B.C. industry disputes that claim.

The coalition has now seized on rules being negotiated within the TPP about state-owned enterprises.

Yocis said those discussions are taking place with an eye to China, "but the governments selling timber would probably meet that definition."

The coalition wants an end to the exemption Canada received under NAFTA allowing provinces to ban exports of unprocessed logs, a policy the coalition argues in a letter to the U.S. Trade Representative has no place in a "high-standard, 21st century trade agreement."

The coalition also wants any new agreement such as the TPP to end the dispute resolution mechanism provisions in NAFTA, saying it is "based on outdated Canadian concerns that have long since been addressed elsewhere and has proven unworkable in practice.

"A TPP agreement that includes Canada should put an end to this highly problematic provision," the letter states.

John Allan, president of the B.C. Lumber Trade Council, said he's concerned, but not surprised, that the coalition is looking to the TPP to resolve its frustrations.

"We've used NAFTA with great success in the lumber wars with the U.S. and they sure don't like it," Allan said in an interview.

He said the coalition's demand for an end to British Columbia's ban on exporting unprocessed logs is also dubious.

"I would look south across the border and suggest to you that log export controls in the U.S. are tighter than they are in British Columbia by many fold. It's a bit of the pot calling the kettle black there."

Allan's group sent a letter to the trade policy division at Canada's Foreign Affairs department saying the council supports Canada's participation in the TPP.

But the group warned the U.S. coalition is "merely using the TPP negotiations to muster U.S. administration support for new actions against both the structure of our trading relationship with the United States and substantial elements of Canada's timber pricing and forest management systems."

Rudy Husny, a spokesman for International Trade Minister Ed Fast, did not indicate that Canada is concerned by the notion that the U.S. softwood lumber industry might try to make Canada's entry into the agreement difficult.

Instead, he noted the coalition welcomed Canada's participation in the TPP in its comments to the U.S. Trade Representative.

"Canada is looking to expand opportunities in this region for our lumber companies by joining the TPP negotiations as soon as possible," Husny said in a statement.

B.C. Jobs Minister Pat Bell said the coalition's sabre rattling over the TPP will make no difference for British Columbia.

"We are already working with the federal government on efforts in Japan, Korea, in India, in China. We have a very good bilateral relationship already," he said, noting a third of B.C. lumber already goes to China.

"I'm feeling very good about our relationship with Asia-Pacific. In Canada, British Columbia specifically, we're seen in a very positive light as a free and open market that wants to trade fairly. I'm happy to have our record stand up against American industries any day of the week."

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VANCOUVER - The powerful softwood lumber lobby in the United States is suggesting it could thwart Canada's efforts to join a Pacific free trade zone if its neighbour refuses to address long-standing i...
VANCOUVER - The powerful softwood lumber lobby in the United States is suggesting it could thwart Canada's efforts to join a Pacific free trade zone if its neighbour refuses to address long-standing i...
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02:09 PM on 04/12/2012
This trade issue is far from settled, and it is entirely unclear whether Canada will ever have to ultimately give up its system of supply management in order to negotiate a deal in the TPP. Currently the United States Department of Agriculture distributes direct subsidies of approximately $20 billion dollars annually to U.S. producers; much of it to large "factory farm" operations (the idea that these subsidies exist to help the "family farm" are nonsense). Those subsidies would almost certainly have to go before the smaller TPP nations would agree to a trade deal.

It ain't going to happen...

As for the U.S. softwood lumber lobby, through their protectionism they have done a magnificent job of negotiating higher lumber prices for American consumers, including home buyers and builders. They are uncompetitive, and they have inferior products. It is in Canada's interests to simply by-pass them and develop markets in China, Japan, and South Korea. The world wants to buy Canadian lumber, so just go ahead and sell it to them...
01:24 PM on 04/12/2012
With the exception of state and federal parks all forests in the U.S. are in private hands and as private owners if they don't like the price of wood at the moment, they don't cut. This leaves the local mills without wood, hence loss of jobs. In Canada all forests are Crown land and the opposite is in place. In order to keep their TFL - tree farm license, companies have to cut a minimum amount of wood to keep loggers working.
In the U.S. they see Canadian wood coming into the country while their mills are idle . Furthermore northern pine from Canada is stronger so US contractors prefer it for walls and studs over southern pine because it warps less.
The result is US mills and logging companies have political backing to attack Canada instead of forcing US owners to cut their wood.
Just another example of US interference in the business of other countries.
11:04 AM on 04/12/2012
"A third of B.C. lumber already goes to China". Make it three thirds!
HUFFPOST SUPER USER
sgillhoolley
Occupy the discussion.
10:57 AM on 04/12/2012
I wish the Canadian government would take a tougher stand on trade issues with the USA. They keep screwing us on Softwood, they keep getting shut down by the NAFTA mediators, but they keep doing it. Why? Because they know that there is no real punishment for failure to adhere to the agreement. Canada needs to retaliate...maybe slap a tarriff on oil/gas. We do supply about 20% of their needs. If they don't like it they can fight it via mediation...should only take about 6 months or so to resolve, probably in their favour. In the meantime we could make lots of money, just like they keep doing to us. Or, typical Canadian fashion, we can bend over and ask for another. Why are we so afraid of them? They are weak, a tin giant covered in rust.
10:29 AM on 04/12/2012
Every time Canada acts in its own interests it's a good thing, but when the U. acts in its own interests it's being greedy. Lesson to Canada: were if not for the US market Canada would have virtually no market. Canada has been the greedy pilot fish on the US for a very long time. Stop whining. The question facing Canada is simple: how to remain competitive in the world while maintaining sky-high wage rates. Easy question, yes. But a very difficult and painful answer.
11:25 AM on 04/12/2012
Hah! Other way around. The US has been the greedy shark for over a hundred years and finally Canada is getting some sense. Bring on China,India,Japan. It's a global economy now and the US can't compete.
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BCPATRIOT
British Columbia
10:24 AM on 04/12/2012
Greedy US wants everything from Canada and as cheap as possible from our lumber, oil, electricity, water, mine ore, etc.

Mean while the US is bankrupt (14 trillion in debt) yet they still print money as if it is going out of style.

Our PM thinks everything is hunky dory in Canada, too bad he wouldn't wake up and smell those wild roses.
09:22 AM on 04/12/2012
I thought bullying was a bad thing?
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Another Pesky Canadian
Talk - action = 0
10:52 AM on 04/12/2012
Yes, it is. It's just that much uglier when a super power treats its "friends" this way.
11:27 AM on 04/12/2012
Not only that,the lobbyists do the dirty work for gutless US politicians.
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HUFFPOST SUPER USER
nikki717
War...what is it good for?
08:59 AM on 04/12/2012
It would not be a good idea to give up the fight on this issue however, there seems to be no headway so far.
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Another Pesky Canadian
Talk - action = 0
10:54 AM on 04/12/2012
This has been an issue for over 20 years.
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HUFFPOST SUPER USER
nikki717
War...what is it good for?
02:33 PM on 04/12/2012
20 years...oh my, Thanx for the info
04:53 AM on 04/12/2012
If we exported milled wood, we'd put more value into our exports while creating jobs at home...something the US doesn't want from any country they exploit natural resources from. I live on a border town and see that our people cross the border to buy OUR lumber for cheaper at American stores and bring it home for our use. I see the same issue with the pipeline idea. Why is no one lobbying to build more refineries in Canada and transport the finished product? Let's build a pipeline to the east, refine it in the centre of the nation where we need economic growth and ship from a central location. I see this pipeline as a temporary growth but long term benefit elsewhere. Why can't we have the control? It's our time to shine.
07:18 AM on 04/12/2012
Not in the interest of the Americans to have us build refineries in Canada. They own our assets and want them used by their own refineries south of our border. Same thing happens with mined resources. They leave the country to be processed elsewhere. The great leader Harper sees nothing wrong with this. He says the oil sands and mines are still here. To him and his acloytes, there is nothing wrong with foriegn ownership and control of our raw resources.

Until we turf out these ideologically challenged Harperites and elect people who genuinely have the interests of this country at heart, we will get more of these problems and Harper is only going to do more to export our resources.
yer
Stop the Alberta Taliban
04:40 AM on 04/12/2012
This is harassment. To counter, all Canada has to do is show how America lost three times to previous panel reviews, never paid the fine, and is still arguing about it. Now, who want to trade with that?
02:57 AM on 04/12/2012
Not sure if I read it right or got the proper spin, but it would seem the US wants the Provinces NOT to be able to control the export of Raw Logs. Looks to me as if they want US Lumber interests in Canada to be able to export Raw Logs to thier mills, since ,in the western states, there are and have been for some time, a shortage of Log in some species. We and our government need to stand up to the bully practices. Having said that, we should not just sell out to yet another country, say China for instance.
07:21 AM on 04/12/2012
And are you going to vote him out if you get the chance? Him being the "Great Leader Harper" who is intent on shipping all our rsources out of the country for processing.
01:53 PM on 04/12/2012
Mr Harper is simply the flavour of the day. He and his cabinet did not bring us NAFTA, nor did he develope the Oil Sands. The practice of exporting Raw Recources out of Canada started even before the lines were drawn in the dirt by the War of 1812. Canadian Governments have all sold out to corporate intrests starting with The NorthWest Co, Hudsons Bay Co, Canadian Pacific Rail, Grand Trunk Rail, and of course the Gold Rush. I remeber as youngster, 50 years ago, my Grandfather protesting and handing out leaflets in downtown Vancouver BC, with respect to Raw Log Exports. The rich Corperate Lobbyists are the true scourge. Governmets become puppets, popular or not.
annyp
A Canuck, eh!
02:20 AM on 04/12/2012
But despite the agreement, the two countries continue to battle out differences. Late last year, the U.S. coalition launched another grievance, saying B.C. is exaggerating the damage from the mountain pine beetle infestation to reduce stumpage fees.

The B.C. industry disputes that claim.

I live in B.C, the pine beetle infestation is not an exaggeration. They need to take a look.
07:22 AM on 04/12/2012
Not in their interests to take a look.
02:09 AM on 04/12/2012
Speaking as an American citizen, not everybody in my country is trying to run your country. In fact it's the fascists that are masquerading as good "Christian Conservatives" that want to take every dime of your money and put it in their pocket. They've already bleed us dry over here and now they're looking for new blood. Feel free to blame us all you like since the majority of my countrymen/women are gullible fools for electing them.
annyp
A Canuck, eh!
02:23 AM on 04/12/2012
There are just too many special interest groups running your country. We see it hear and it looks like finally you are starting to fight back. I don't like your GOP with what they are doing to the women in your country. Never seen such an attack from the party of "small" government. I really hope that women vote these people out but then the election isn't until November and some have short memories.
07:25 AM on 04/12/2012
And will you be organizing against the "Christian Conservatives" or sitting on the side lines?
Nothing will happen to change things unless it begins ith indiv iduals. It is said that all politics is local. Defeat whoever is not acting in your behalf by organizing .
paintitblacker
shit happens life goes on
01:39 AM on 04/12/2012
the only long standing irritant i'm aware of is Americans trying to run our country, I don't know who said it first but good fences make for good neighbors
02:37 AM on 04/12/2012
We need a prime minister who favours independence rather than subservience to foreign interests.
07:47 AM on 04/12/2012
Hopefully you are not sitting on the sidelines and just bitching and chewing about him and his minions.

I am far too old to become politically active except to vote. I am hoping that those who are much younger are doing something right now to get rid of this neo-Con government in Ottawa. There used to be in this country a Progressive Conservative party, before Mulroney, that was " Red Tory ". It functioned most of the time with a decent balance of fiscal conservatism and social responsibility. I voted for them consistently. That stopped when Mulroney began to give away this country to the U.S. with the North American Free Trade agreement. The Liberals elected to do nothing about amending or renegotiating this agreement.

Prior to the free trade agreement, we negotiated an agreemnt on automoboles which paved the way for the continued development and expansion of that industry . That agreement was an ideal example of a ' managed trade agreement " that worked to our advantage and resulted in thousands of good paying jobs in Canada. The North American Free Trade agreement destroyed all that and resulted in the sell of of our resources, something whch Harper is continuing to do today.
12:05 AM on 04/12/2012
In times like this, I just think WWPD? And pray in memory of Gepetto.