Canada's Chretien heads to heart of softwood fight
Copyright 2001 Reuters
November 8, 2001
By Allan Dowd
VANCOUVER, British Columbia, Nov 8 (Reuters) - Prime Minister Jean Chretien ventured into the heart of Canada's forest industry on Thursday, promising to keep pressure on the United States to resolve the countries' bitter trade fight.
Chretien's Liberal Party has been accused in the past of ignoring the concerns of Western Canada's lumber industry, but the companies have recently begun praising him amid signs that Ottawa is taking a stronger stand against Washington.
The trade fight has resulted in thousands of layoffs in Canada's lumber industry, most of them in British Columbia, which produces nearly half the C$10 billion ($6.4 billion) in softwood lumber shipped to the United States each year for use in the construction industry.
The Prime Minister met with industry officials and British Columbia Premier Gordon Campbell to assure them the trade fight was a top priority and discuss strategy. ``The problem is not us, its them (the U.S.),'' Chretien told reporters.
Campbell acknowledged one of the strategies discussed was whether Canada should link its demand for open access to the U.S. lumber market with the United States' need for Canada's vast oil and natural gas supplies.
``We talked about the whole range of things we're doing and the strategies we're following. I think what is important is that we're focused,'' said Campbell, who has been reluctant to link the energy and lumber issues.
The United States alleges Canada subsidizes its softwood industry by charging below-market rates to log in its vast public forests. It has hit Canadian shipments with anti-dumping
and countervailing duties in the range of 32 percent.
Canada denies the allegations and maintains the penalties are designed to protect inefficient U.S. sawmills from losing market share.
The 19.3 percent countervailing duty was imposed in August, but a key industry official speculated on Thursday that Ottawa was moved to put more importance on the lumber trade fight by the U.S. Commerce Department's decision last week to also impose anti-dumping duties.
The anti-dumping duties, which average 12.58 percent, also included lumber companies in Atlantic Canada that were not covered by the earlier duty.
``Now that the dumping duties have come down, the cutbacks have begun to spread across Canada,'' said John Allan, head of the B.C. Lumber Trade Council.
Chretien is from Quebec, where Domtar Inc. (Toronto:DTC.TO - news) announced on Thursday that it was halting production at three lumber mills and laying off 226 employees because of the U.S. trade restrictions.
``I have wood producers in my riding (district). I know if they produce wood and can't sell it they have a problem,'' Chretien said.
The lumber dispute has overshadowed the other issues on Chretien's one-day agenda in Vancouver, including the official endorsement by Ottawa of Whistler, British Columbia's bid to host the 2010 Winter Olympics.