Softwood spat stuck in a ‘Groundhog Day loop’
The softwood lumber dispute has hit “a bit of a Groundhog Day loop,” Premier John Horgan said Thursday, as the U.S. Department of Commerce issued its final determination for punitive duties against Canadian lumber imports.
Horgan said Canada and the U.S. had a narrow window to reach a trade agreement, but negotiations couldn’t get past protectionist interests in the U.S. industry.
That kept the American trade litigation on track for Thursday’s decision on tariffs, which federal Minister of Foreign Affairs Chrystia Freeland promptly promised to appeal in what is now the fifth round of the long-running trade dispute.
“It’s a narrow group who stand to personally benefit from this, that leads us to this debate every decade or so,” Horgan said during a news conference the province called to announce its support for Canada’s appeal of the duties.
“Now we have to continue with what has become a bit of a Groundhog Day loop,” Horgan said, alluding to the Bill Murray comedy about living the same event over and over, “through litigations and tribunals.”
U.S. Commerce Secretary Wilbur Ross said he was disappointed the countries couldn’t reach an agreement, but the tariff decision was “based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”
The final duties, which will be permanent if no trade deal is reached to supersede them or they are not overturned on appeal, were set at a total of between 20.8 per cent and 22.1 per cent, depending on the lumber company.
They are lower than the preliminary tariffs issued in January, which were as high as 31 per cent in total, but they are still “unwarranted and completely without merit,” said Susan Yurkovich, president of the B.C. Lumber Trade Council, the province’s key trade lobbying group.
A portion of the case, which refers to anti-dumping penalties in the U.S. Commerce Department’s decision, still has to be decided by the U.S. International Trade Commission, but Yurkovich said Canada “will be immediately filing appeals.”
“In the past we’ve used both NAFTA Chapter 19 (dispute-resolution proceedings) and the World Trade Organization, and we expect to use those venues again,” Yurkovich said.
Yurkovich characterized the dispute as the U.S. industry using trade tools to limit Canadian access to the U.S. market, which helps keep prices high to their benefit but to the detriment of U.S. consumers.
In 2016, Yurkovich said, there was a significant deficit between what the U.S. lumber industry produced and what the construction market consumed, which she argued shows there is a need for Canadian imports.
With U.S. housing construction projected to increase, Yurkovich said there is plenty of room for U.S. producers to increase their milling capacity, so the argument their producers are being injured by Canadian practices “is ridiculous.”
“They have never made more money in the last 30 years — never,” Yurkovich said.
On the American side, the U.S. Lumber Coalition welcomed the decision to help its members “compete on a level playing field,” so they can increase production to meet U.S. lumber demand, coalition co-chair Jason Brochu said.
U.S. lumber producers mainly buy timber from private landowners, and a group that represents their interests welcomed Thursday’s determination.
“Our concern (as landowners) is having to sell timber in a market with the Canadian government as a competitor where we will never be the low-cost supplier,” said Scott Jones, CEO of the Georgia-headquartered Forest Landowners Association.
Yurkovich said B.C. producers haven’t had to curtail operations or lay off employees due to the punitive duties, but value-added wood mills have been having a harder time, said Russ Cameron, president of the Independent Wood Processors Association of B.C.