Soft­wood sec­tor court­ing China as Trump ramps up trade at­tacks

Times Colonist - - Business - MIKE BLANCHFIELD

OT­TAWA — As U.S. Pres­i­dent Don­ald Trump added soft­wood lum­ber to his anti-Canada trade rhetoric Thurs­day, Trade Min­is­ter François-Philippe Cham­pagne was on his way to China with an en­tourage of in­dus­try rep­re­sen­ta­tives look­ing for an al­ter­na­tive to the United States mar­ket.

One se­nior gov­ern­ment of­fi­cial who spoke on the con­di­tion of anonymity char­ac­ter­ized one por­tion of the visit as a “trade-mis­sion ori­ented trip on soft­wood.” New Brunswick, Que­bec, Bri­tish Columbia and On­tario pro­duc­ers were all rep­re­sented.

“For all sorts of rea­sons, we’re strik­ing while the op­por­tu­nity is ripe, to show­case, to take com­pa­nies with us to pro­mote them,” said the of­fi­cial, who wasn’t au­tho­rized to pub­licly dis­cuss details of the trip.

Es­ti­mates of how much of Canada’s soft­wood lum­ber is shipped to the U.S. are as high as 70 per cent, but the fed­eral gov­ern­ment has placed a pri­or­ity on find­ing new trade mar­kets in Asia — es­pe­cially China — for a va­ri­ety of goods and ser­vices.

In­deed, Canada’s soft­wood in­dus­try makes no se­cret of its own search for op­por­tu­ni­ties in China. Canada Wood, an in­dus­try trade group, said this month it would “take the first steps to ex­tend its reach to Wuhan, which is the eco­nomic en­gine of cen­tral China,” by es­tab­lish­ing a joint Sino-Cana­dian Mod­ern Wood Con­struc­tion Tech­nol­ogy Cen­tre in the Chi­nese city of more than 10 mil­lion.

“Canada Wood China is vy­ing for a piece of China’s $44-bil­lion ho­tel in­dus­try by pro­mot­ing low­den­sity, wood-frame ho­tels to the Chi­nese ho­tel in­dus­try,” the or­ga­ni­za­tion’s web­site added.

While ex­ploratory talks on a Canada-China free trade deal be­tween gov­ern­ment of­fi­cials take place in Ot­tawa next week, the first round of a high-level eco­nomic and fi­nan­cial dia­logue will un­fold in Beijing.

Cham­pagne will be joined by Fi­nance Min­is­ter Bill Morneau; their Chi­nese coun­ter­part will be Vice Premier Wang Yang, who is also China’s point man on re­la­tions with the United States.

Soft­wood lum­ber is a long­stand­ing ir­ri­tant be­tween Canada and the U.S. The two sides are work­ing on a new agree­ment to re­place the nine-year truce that ex­pired in 2015.

The U.S. Com­merce Depart­ment is ex­pected to de­cide by Tues­day whether to im­pose du­ties on Cana­dian soft­wood, which Amer­i­can pro­duc­ers say is overly sub­si­dized and un­fairly floods their mar­ket.

This week, Trump blamed Cana­dian dairy pol­icy for driv­ing Amer­i­can farmers out of work, and he ratch­eted up his anti-Cana­dian in­vec­tive Thurs­day from the Oval Of­fice by call­ing Canada’s ac­tions a “dis­grace.”

He also widened his at­tack, say­ing, that “in­cluded in there is lum­ber, tim­ber and en­ergy. We’re go­ing to have to get to the ne­go­ti­at­ing ta­ble with Canada very, very quickly.”

On Thurs­day, Prime Min­is­ter Justin Trudeau said he will con­tinue to pro­tect Canada’s agri­cul­ture pro­duc­ers — in­clud­ing its sup­ply-man­age­ment sys­tem for dairy — as he tries to en­gage with the U.S. ad­min­is­tra­tion on a va­ri­ety of trade ir­ri­tants.

Trudeau said he wants to have a fact-based con­ver­sa­tion with the Amer­i­cans, not­ing the U.S. — like other coun­tries — sub­si­dizes its dairy and agri­cul­ture in­dus­tries to the tune of hundreds of mil­lions, if not bil­lions, of dol­lars.

The U.S. cur­rently en­joys a $400-mil­lion dairy sur­plus with Canada, “so it’s not Canada that is a chal­lenge here,” he said Thurs­day in a ques­tion-and-an­swer ses­sion with Bloomberg tele­vi­sion.

Trudeau made his re­marks prior to Trump’s lat­est broad­side, which came just min­utes later.

“Canada, what they’ve done to our dairy farm work­ers, is a dis­grace. It’s a dis­grace,” Trump said. “Rules, reg­u­la­tions, dif­fer­ent things have changed — and our farmers in Wis­con­sin and New York State are be­ing put out of busi­ness.”

Trump was am­pli­fy­ing the com­plaints of Wis­con­sin and New York gov­er­nors, who say Canada’s de­ci­sion to cre­ate a lower-priced clas­si­fi­ca­tion of milk prod­uct has frozen U.S. pro­duc­ers out of the Cana­dian mar­ket.

Trudeau ac­knowl­edged the con­cerns of those two states, but said: “Any con­ver­sa­tion around that starts with rec­og­niz­ing the facts. I un­der­stand how cer­tain gov­er­nors are speak­ing to cer­tain con­stituen­cies on that. It’s pol­i­tics.”

Trudeau sig­nalled that he is op­ti­mistic he can per­suade Trump, say­ing the U.S. pres­i­dent is “un­like many politi­cians” and avoids the in­stinct to “stick with” a par­tic­u­lar po­si­tion.

“He has shown if he says one thing and then ac­tu­ally hears good counter ar­gu­ments or good rea­sons why he should shift his po­si­tion, he will take a dif­fer­ent po­si­tion if it’s a bet­ter one, if the ar­gu­ments win him over.”

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