B.C. explores softwood options in China, India amid U.S. trade dispute

December 1, 2016

By: The Globe and Mail

The prospect of a reignited trade dispute with the United States over Canadian softwood lumber exports has British Columbia looking for new customers in China and India.

Mike de Jong, B.C.’s Minister of Finance, said Tuesday that the United States remains B.C.’s largest market for softwood lumber exports at a value of $3.3 billion last year, but the province is finding buyers in Asia.

Since 1982, lumber trade between Canada and the United States has resulted in court battles and produced three managed trade agreements.

The recent election of protectionist Donald Trump as the country’s next president prompted the U.S. Lumber Coalition to petition the U.S. government to impose duties against Canadian lumber.

Mr. de Jong said B.C. is preparing a defence along with other governments and the industry against potential U.S. challenges. But it’s also mounting expansion efforts to buffer the United States.

“We are amplifying our efforts to do something we did around [the last] softwood negotiations and that is diversify our markets,” he said. “We have redoubled our efforts in India and are beginning to see results. We are in China now to further encourage efforts at reducing our dependence on a U.S. market that may become somewhat unpredictable.”

Representatives from B.C.’s forestry industry and government are currently in Asia on a lumber trade mission and Mr. de Jong recently returned from India on a similar mission.

Steve Thomson, Minister of Forests, Lands and Natural Resource Operations, said in an interview from Shanghai, that B.C. lumber products are finding buyers in China.

“China is our second most important market, worth about $1.2 billion and continues to have lots of opportunities,” he said.

Council of Forest Industries president Susan Yurkovich said she is confident Canada and the United States can reach some kind of lumber trade deal.

“The growing U.S. economy is going to require our product,” said Ms. Yurkovich, who is also on the China trade mission. “Building and construction is a huge part of that continued recovery of the U.S. economy.”

Mr. de Jong said such a trade dispute has economic consequences for B.C. and Canada, but it also hurts millions of Americans whose jobs rely on trade.

“There are millions and millions of Americans who have jobs because of trade with Canada,” he said. “An interruption to that trade will put those Americans out of work. They need our wood.”

Quebec’s government also spoke out Tuesday about the potential lumber-trade dispute, saying Canada must create a loan guarantee program to ensure lumber producers continue to have access to the U.S. market.

Economy Minister Dominique Anglade said she requested a meeting with federal International Trade Minister Chrystia Freeland on Dec. 8 to discuss the softwood dispute.

About 60,000 people work in Quebec’s forests industry. In B.C., more than 65,000 people hold forestry jobs and about 40 per cent of province’s rural communities are dependent on the industry.

The 2006 softwood lumber agreement between Canada and the United States expired a year ago and a one-year standstill period has not produced a new deal.

By: The Globe and Mail

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