U.S. launches legal action to reignite lumber war with Canada

Go ahead USA..then you can chop down your own trees, there is no law that requires us to sell you anything, and instead of going after us over wood, why dont you put more effort into stopping China from product dumping!!!

Oh wait, you cant your society is a gluttony for cheap crap and they hold over 80% of your National Debt

This shit again?

"The powerful U.S. lumber lobby Coalition for Fair Lumber Imports applauded the Obama administration for targeting B.C."

Didn't Bush gives us back 80% of what was owed to us regarding lumber disputes when Harper asked back in 06 ?

And the left wing loonies were worried about Bush.

Whats the real lowdown on this softwood saga? I remember reading about this on the old CBC message boards several years ago. There wasn't a whole lot of usefull discussion on the subject at the time,mainly a lot of name calling and anger {everyone seemed to be pretty pissed off a few years ago}. I swear I don't recall ever seeing a single word about this in the American media. They would have to find a middle east terrorist cell hiding out in our national forrest for our timber industry to make the news here.Anyone care to enlighten me?

It doesn't have dick shit to do with Bush or Obama.
The USA's corporate masters don't give a shit who's president.

In BC, most forest land is owned by the crown. Timber companies pay a stumpage fee on the wood they take out. The US companies assertion is that because there is no free market mechanism to establish prices, the lumber is subsidized. It probably is. A friend of mine who worked in the industry said that a log that would sell for $500 to the US would be turned into $200 worth of lumber by MacBlo (at the time the biggest forest company). ie they were subtracting value by sawmilling the log. Also the BC govt uses stumpage for social purposes - ie to keep towns alive by reducing the cost of the wood so the mill won't close. With all the bark beetle killed wood, BC set a low stumpage so it would be economical to log, flooding the market. BC has to find a way to go to a market driven pricing system, or this will never go away. But they seem content to just pay the tariff and subsidize the forest industry. Maybe because Canada actually has to pay the tariff, not the provinces.

That's my off the top of my head asessment - I'm sure I've left out all sorts of nuances.

The U.S. lumber lobby is powerful? When I think of powerful American lobbies I think of the NRA or the ACLU or AIPAC.

The US asserted that the crown being involved in the past has lead to subsidies, and these claims have been defeated in London before -- repeatedly. That there has been a supply shock in the form of these beetles which has caused problems in Canada is a free market principle which could easily change the pricing of these goods (the question here being what is considered "salvage" lumber). Demanding that the goods remain the same price even after such a thing occurs sounds more like price setting across the border than actually allowing the market to play out on it's own, as is the declared public wishes of this lobby group.

However, there is always the possibility that the US is right in this case. While they have never won a case related to subsidies in an international court, with the end result being the pronouncement that subsidies were less than 1% and hence negligible, there have been cases of Canadians passing by quotas and other measures which the US has succeeded in suing Canadians for in the international court. Personally, this smells more of attempted protectionism to defend against shocks for an uncompetitive industry down in the States, but that's just me. Similar instances in the past have lead to the US imposing tariffs on Canada which far outweighed any potential subsidies, according to some studies, and I'm concerned this may be the same thing all over again.

Considering they always lose the court cases, it seems to be the only answer. And Harper will just concede defeat on the eve of victory, once again when they do lose and pay the lobbyists and the White house billions for losing.

Since 1980, Canada has 3 times challenged the USA’s treatment of our lumber industry before international trade disputes panels. Each of those hearings ruled in Canada’s favour but were ultimately ignored by the USA. That’s the core of the problem. When the USA loses a trade ruling, they just ignore it. In 2001, the US Dept. of Commerce imposed a 19% tariff, which cost the BC lumber industry some $2B per year in tariffs alone. The WTO has instructed the USA to return those billions. What did the Americans do? They decided that Canada wasn’t only subsidizing, but also dumping lumber and so Commerce added another 12% duty.

So what do we do? We could tell the Yanks to jam it and just stop providing them with lumber, but Canada employs roughly 350,000 people in the lumber industry (two thirds of those jobs are in B.C. and Quebec). The value of our lumber as export trade is around $50B per year. That leaves us with one option: kiss the Americans’ arses. We have no choice but to make the best deal we can make and go on letting them cheat us.

What’s silly is why the Americans are fighting us on this. It’d be in their best interest to let us supply them with cheap lumber, even if we were subsidizing. Consider subsidization taken to the extreme: let’s say the Canadian government decided to subsidize lumber at a rate of 110% and give it away free to the Americans. In other words, for every $100 of wood we export (at a price of zero dollars), our government would give our lumber industry $110. Sure, we’d be broke in moments, but what effect would it have on the US economy? It would bankrupt the US lumber industry but it would be a MASSIVE benefit to their economy as a whole. They could have just as much wood as before, while freeing up workers and capital to be used in other economic pursuits. Their economy would flourish.

Whenever I hear Canadians bitch about other countries subsidizing I say “Let them subsidize away”. It’s like a foreign government giving us a free gift.

Whether we subsidize or not, it seems to me there's a simple remedy, which is to go to market pricing. Then the yanks have no beef, and we wouldn't have to keep paying tariffs. I don't understand why BC is so resistant to this idea.

It's this sort of thing that pisses the Americians off - that we can just raise or lower stumpage rates on a whim. I don't see why we can't auction off at least a portion of Crown wood, and set the stumpage rate from that.

That's about the only good thing I saw in that entire article.

Now if we could only get more of our industries to follow suit, we wouldn't be so beholden to the whims of US and their hordes of lobbyists.

I would disagree that we are raising or lowering it on a whim, andy. This was fairly historic in what happened here, as the article said, and doesn't exactly happen to this degree or magnitude frequently. A lot of thought would have had to go into a decision like this.

Besides which, the article you quoted that from goes on to state:



There was a recognized shift in the nature of the logging industry and the economy surrounding it, and a move was made to rectify the problem. In an attempt to follow market prices, stumpage rates were reduced, and as mentioned in the article, this is something they are doing cautiously and carefully -- this was not done just because someone wanted to do it, it was done to reflect the ongoing reality of the lumber industry.