Canadian forestry industry awaits Trump’s stand on softwood lumber deal

VANCOUVER (Scrap Monster): The Canadian forestry sector has expressed optimism on a new softwood lumber deal with the US, despite the US ITC’s preliminary finding that imported Canadian lumber products continues to cause material injury to the US domestic lumber industry. All eyes are now on Trump’s move, after he takes office as the new President.

The US is a key market for B.C’s Forestry sector, accounting for 70% of its wood products exports. The loggers in the region are still optimistic that a deal could be reached between the two countries. Meantime, the B.C Forests, Lands and Natural Resource Operations Minister Steve Thomson noted that the US has raised the same allegation before also, that have been proved false before NAFTA and World Trade Organization (WTO) tribunals. He extended full support to efforts aimed at resolving the long-pending dispute through fair agreement. However, in the event of a trade war, the provincial government will stand by the federal government in its fight against the US action, Thomson said.

Meantime, B.C. NDP leader John Horgan criticized the provincial government for its inaction. According to him, the lumber trade war has now reached a critical stage and lack of strong action by the government could adversely affect communities and forestry workers across the province. The B.C Liberal government should go ahead with concrete actions to defend the shrinking forestry industry, he added. Further, he accused the provincial government for failing to recognize the significance of forestry industry to B.C’s economy.

Horgan noted that forestry sector has taken a beating over the past several years. Nearly 150 mills have closed since 2001. Premier Christy Clark hasn’t lifted a finger to help the industry, he claimed. On the other hand, the US administration and trade bodies have fought well to defend their case, he said.

The Nova Scotia Trade Minister too has expressed strong optimism after the recent meeting held in Washington. The team comprising of Michel Samson, Natural Resources Minister Lloyd Hines, as well as representatives from the provincial lumber industry had held negotiations with David MacNaughton, Canada’s ambassador to the United States, and Zoltan van Heyningen, executive director of the United States Lumber Coalition and its legal counsel.

The Minister hoped that wood from the province will be excluded from tariffs. The wood exports from Atlantic Canadian provinces have so far been exempted from tariffs by all previous softwood lumber agreements. This is mainly because, most wood in Atlantic Canadian provinces are cut from land owned by private business instead of Crown land. It is important for the provincial government to ensure a deal that maintains tariff exclusion, mainly due to the fact that large majority of lumber produced in the region is exported to the US.

The lumber trade dispute between the two countries is dated back to 1982. The two countries had signed a bilateral agreement in September 2006. The original seven-year agreement had an optional provision to extend for a period of two years upon consensus by both parties. Accordingly, the deal which came to an end in 2013 was extended until 2015. As per the terms of the deal, parties were prohibited from engaging in trade actions for one-year grace period, which has already come to an end on 12th October, 2016.