By: Business Vancouver
Japan did not succeed in getting B.C. log export restrictions relaxed during the Trans-Pacific Partnership (TPP) negotiations, but the issue could resurface if and when Canada and the United States sit down to renegotiate the Softwood Lumber Agreement.
“It has played a role in the past and it could come up again,” said Harry Nelson, a forestry professor at the University of British Columbia. “It could be the case that any deal cut with the U.S. might have to include other [TPP] countries as well.”
Raw log exports, which increased sharply during the past two decades, have been a political flashpoint in British Columbia. The B.C. government limits the number of logs that can be exported. To meet the needs of domestic sawmills, the province mandates that only surplus logs be exported, and it places additional rules on raw logs cut from Crown land compared with logs harvested on private land.
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Critics say allowing raw logs to be exported instead of using them in local manufacturing has contributed to sawmill closures and job losses. But forestry companies say exporting raw logs helps them stay economically viable.
In the past, the U.S. lumber lobby has protested B.C.’s raw log export fee. The 2006 Softwood Lumber Agreement imposed a 15% tariff on Canadian lumber; the provincial government increased the raw log export fee in 2007 to counter the effect of the tariff.
The United States, Japan, China and Korea would all like more raw logs from B.C., said Nelson.
“The free flow of high-quality coastal logs is … what Japan and the U.S. want, as well as other countries (e.g. Thailand) which recently have been forced into buying spruce-pine-fir lumber because of log shortages at home,” lumber analyst Peter Woodbridge wrote in an email to Business in Vancouver.
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While Japan had been lobbying for greater access to Canadian logs during TPP negotiations, “the TPP fully protects Canada’s export log regime at both the federal and provincial level,” according to a spokesperson from the federal Department of Foreign Affairs, Trade and Development.
Canada and Japan have made a separate agreement to create a bilateral committee to discuss forestry trade issues.
In a September 2015 report called Branching Out, Canada West Foundation researcher Naomi Christensen wrote, “It is possible that the U.S. plans to deal with softwood lumber trade through this larger trade deal [the TPP].”
Full details of the TPP will not be made available until after the October 19 federal election, government officials told the Canadian Broadcasting Corp. on October 14.
Forestry companies in B.C. welcome the TPP agreement, said Rick Jeffery, president and CEO of the Coast Forest Products Assocation. Canadian companies already face few tariffs when exporting to Japan, an important market for high-quality lumber from B.C.
But other TPP countries like Vietnam have very high tariffs. Removal of those tariffs will help B.C. companies gain access to those markets. The TPP also “provides a rules-based approach to non-tariff trade barriers” and to ways of ensuring that logs are kept free of pests and pathogens, Jeffery said.