Negotiations for a new deal to regulate Canadian lumber exports to the U.S. are continuing as the protection of the latest softwood lumber agreement expired last week.
As of Oct. 12, 2016 the U.S. industry is free to launch new trade actions against Canada, although new tariffs can’t be imposed until six months after a formal complaint is filed. With most U.S. lumber exports coming from B.C., the temporary period of free trade may be the calm before the storm for the B.C. industry.
Steve Zika, Chief Executive Officer of Hampton Affiliates – company that owns Babine Forest Products and Decker Lake Forest Products -, said any additional taxes or tariffs could have a negative effect on individual operations in the Burns Lake area.
“Depending on market or economic conditions at the time, these additional costs could result in less operation hours or closures of some facilities,” he said earlier this year.
The Canadian and U.S. governments issued a joint statement last week promising to continue talks towards a “durable and equitable solution for North American softwood lumber producers, downstream industries and consumers.”
However, that solution may have to wait until after the U.S. election in November, with a campaign marked by anti-trade rhetoric from republican presidential candidate Donald Trump and democrat Hillary Clinton.
Whatever the solution, it will not be free trade in lumber. Prime minister Justin Trudeau and U.S. president Barack Obama agreed in June that a new agreement would be “designed to maintain Canadian exports at or below an agreed-upon U.S. market share to be negotiated.”
The U.S. industry has long maintained that B.C. lumber is subsidized by an artificially low price paid for Crown land timber.
Premier Christy Clark and other provincial leaders wrote to Trudeau in July, asking him to refute “unfair and inaccurate allegations of Canadian lumber subsidies” made by 25 U.S. Senators.
Susan Yurkovich, president of the B.C. Lumber Trade Council, said the industry has been working for months to avoid “another lengthy trade dispute that creates uncertainty, hurts consumers and producers, and impedes the growth of the North American market.”
B.C. Forests Minister Steve Thomson is heading a forest industry trade mission to Japan and China in late November, part of Canada and B.C.’s effort to diversify lumber trade beyond the U.S. market.
