Anti-dumping duties of 12.6% hit Canadian lumber exporters
Copyright 2001 Toronto Star
November 1, 2001
By Daniel Girard, WESTERN CANADA BUREAU
Thousands more forestry jobs are on the chopping block with the latest U.S. duty on Canadian softwood lumber, industry leaders warn.
"It's going to be a pretty cold winter," warned Jake Kerr, chairman of Lignum Ltd., a forestry company in central British Columbia, which has already scaled back production and now may be forced to lay off more workers.
The United States commerce department yesterday levied an average 12.6 per cent duty on Canadian softwood lumber exporters, ruling they dumped their products at below-cost prices south of the border.
That is on top of a 19.3 per cent interim tariff levied in August when the U.S. said the Canadian industry had a price advantage because it is subsidized through low fees charged by provinces to cut timber on crown lands. "This combined rate of duty, as if the 19 per cent wasn't enough, will put a huge number of jobs at risk," said John Allan, president of the B.C. Lumber Trade Council, whose members produce 90 per cent of the province's softwood exports.
"This is not the way two countries should engage in a trading relationship," Allan said at a Vancouver news conference.
B.C. Forests Minister Mike de Jong called the duty "another kick in the teeth."
British Columbia, which produces about half the $10 billion a year of Canadian softwood lumber exports to the United States, has seen about 18,000 layoffs since the first duty was levied in August, analyst Charles Widman said.
By Christmas, he said, the second duty will mean that figure is likely to climb to 30,000 or half B.C.'s workforce in the softwood sector and as many as 50,000 people across Canada.
"This is a disaster," Widman said in an interview. "It points out again the desperate need for very high level of negotiations between the federal government and the (U.S. President George W.) Bush administration."
Canadian producers and governments reject the U.S. contention that the industry here is unfairly subsidized or dumped its lumber.
Ottawa has already announced an appeal of the 19.3 per cent duty to the World Trade Organization but a decision is as many as two years away. Three separate international trade panels have sided with Canada in the past.
The duty levied yesterday is also an interim one. Both could be finalized by the U.S. International Trade Commission next spring.
In the meantime, Canadian producers will be required to take out bonds to cover the value of both duties on each shipment south.
B.C. lumber producers, who condemned the latest duty as "punitive, destructive and trade protectionism in the extreme," called on Ottawa to get tough with the Americans. They want the government to link lumber to trade in other commodities, such as electricity.
"How long are we going to allow ourselves to be cherry-picked whereby we send energy and electricity and other valued products into the U.S. market but we allow ourselves to be victimized on forest products," said David Emerson, chief executive of Canadian Forest Products Ltd., or Canfor, the country's largest exporter of softwood lumber to the United States.
American consumer groups and home building associations have urged the U.S. government to drop the duties, saying they will, on average, add more than $1,000 (U.S.) to house prices.
In Ottawa, International Trade Minister Pierre Pettigrew said the United States is only hurting itself with the extra duty. "The Americans have really come to hit themselves with a two by four right on the head . . . hitting and harming their own economy, their own interests," he told reporters.
But Pettigrew appeared cool to calls for the government to link the lumber dispute to U.S. access to Canadian energy and other products.
Pettigrew said talks with the United States are ongoing, with the next meeting scheduled for Nov. 12 in Washington.