By: Vancouver Sun
B.C.’s forest products industry may not have the economic heft it had 25 years ago, but it remains the lifeblood of many small communities in the Interior and on the North Coast.
So the expiry on Wednesday of a standstill agreement that had effectively extended the 2006 Canada-U.S. Softwood Lumber Accord, which officially ended last October, is cause for concern for communities such as Quesnel, where trade action by U.S. producers could put two mills and 400 jobs in jeopardy.
Although B.C.’s lumber exports are not as dependent on the U.S. market as they were when the trade accord was signed, the U.S. remains the destination for more than 40 per cent (by value) of provincial lumber exports. It is worth noting, too, that B.C. accounts for 50 per cent of Canada’s softwood lumber production. B.C. sawmill sales last year, mainly lumber, amounted to $4.9 billion, by far the largest component of B.C’s forest products industry.
Should the U.S. Lumber Coalition, which represents producers and woodland owners, succeed in legal action against Canada, exporters will have to start paying a penalty next March, with a final U.S. government decision on the amount of countervailing and anti-dumping duties expected at the end of 2017.
Meanwhile, federal Trade Minister Chrystia Freeland and U.S. Trade Representative Michael Froman have pledged to continue negotiations toward an equitable solution. Both recognize that U.S. consumers would be hit as hard as Canadian exporters if access to Canadian lumber was severely restricted or subject to tariffs that would make it more expensive.
Fortunately, trade action by the U.S. would likely not result in a recession as it might have years ago because the B.C. economy is more diversified, with economic drivers (film and TV, technology, real estate, construction and tourism) largely based in urban areas.
Nevertheless, a new softwood lumber deal is important and it is encouraging to see the federal government taking the matter seriously. Indeed, Freeland said the government will “vigorously defend” the interest of workers and producers.
We trust those good intentions will lead to a durable agreement that will meet the needs of the industry in both countries.
By: Vancouver Sun