WASHINGTON – A dispute that reaches back to the Reagan administration continued Tuesday with the United States lumber industry once again voicing its disapproval of what it called Canada's unfair advantage in the market.
The Senate Subcommittee on Trade,Tourism and Economic Development held a hearing chaired by Sen. Gordon Smith,R-Ore.,to hear from consumers and loggers about the debate over Canadian softwood. The current disagreement began in 2001 after the 1996 Softwood Lumber Agreement expired.
The U.S. exported more than $210 billion worth of goods to Canada in 2005,and imported $285 billion. About 2 percent of the bilateral trade was in softwood lumber,spruce and pine often used to fame new houses. Still,Smith was alarmed by the nearly 80 U.S. mills that closed in 2000 alone,more than twice the number in Canada.
Franklin Lavin,under secretary of commerce for international trade,and Steve Swanson,chairman of the Coalition for Fair Lumber Imports,an alliance of sawmill owners,both testified that subsidized and dumped Canadian lumber is the main factor injuring the U.S. industry.
Swanson said government subsidies allow Canadian lumber prices to be on average 70 percent below what they would be on the free market.
“This issue would disappear the day that Canada made reasonable … and enforceable commitments to end their unfair trade practices,” said Swanson,president of the forest-products company Swanson Group Inc.,based in Glendale,Ore. “Canada simply refuses to do so because it is addicted to subsidies and has been unable to break the habit.”
Swanson testified that Canada exploits the North American Free Trade Agreement to sidestep U.S. trade laws,calling NAFTA's rules “unconstitutional.”
The system,which includes international enforcement panels,“is rife with conflicts of interest,accountable to no one,and is repeatedly telling the United States … how to interpret its own laws,” Swanson said.
Bill Kluting,legislative representative for the Western Council of Industrial Workers,delivered statistics and personal accounts to show that Canadian softwood has hurt the more than 10,000 lumber workers he represents in the West.
Kluting,a former electrician at the now closed Dallas,Ore.,mill,cited 52 softwood sawmill closings in Washington,Montana,Northern California and Idaho over the last five years and 4,273 workers who were laid off as proof of Canada's effect on the industry. In Washington and Northern California alone 30 mills closed and 2,978 workers were laid off during that time.
Kluting said many factors contribute to closings,adding,“We firmly believe,however,that Canadian lumber imports,which make up just over one-third of the total U.S. lumber market,were a significant contributor to all of these 52 shutdowns.”
The U.S. experienced the second-highest housing demand in history in 2005,Smith said.
Barry Rutenberg,a member of the National Association of Home Builders' board of directors,told the subcommittee that he and other builders can not provide cost-efficient homes without certain species of timber,which generally come from Canada.
“The simple and critical fact is that the U.S. home building industry can not meet the need for new homes and improvements to existing homes without lumber imports from Canada,” said Rutenberg,president of Rutenberg Homes in Gainesville,Fla. “Border restrictions on Canadian lumber only serve to act as a hidden tax on American consumers.”
Canada and the U.S. are expected to respond to a Fair Lumber Imports report next month.
Deputy U.S. Trade Representative Susan Schwab said negotiations have not begun with Canada's new international trade minister,but the agency is looking “forward to working with the new government in Canada” and will “sit down and begin discussions at any time.”
Smith said that is imperative for Oregon and the U.S.
“My mills can compete against other mills,” he said. “But they can't compete against the Canadian government.”