By U.S. Sen. Olympia J. Snowe
(R-Maine)
The economic relationship between the United States and Canada is one of the most extensive in the world, and this fact is reflected in the staggering volume of bilateral trade between our two countries – the equivalent of $1.5 billion a day in goods according to the U.S. Department of Commerce. Yet, the preservation of this partnership also requires that both sides live up to their obligations under existing trade agreements, and in the case of the lumber and forestry industries, this has led to a quarter-century long struggle to ensure U.S. softwood lumber producers have the opportunity to compete on a level playing field with their Canadian counterparts.
The trade-distorting practice of primary concern has been the Canadian provinces’ provision of government-owned timber to Canadian lumber companies at an artificially low “stumpage fee,” which represents a fraction of its market value and in turn puts the lumber and forestry industries in Maine at a severe disadvantage. After years of litigation, the U.S. and Canada entered into the 2006 Softwood Lumber Agreement to at long last provide fairness for American lumber producers by putting an end to these Canadian subsidies.
Unfortunately, there are now strong indications that one province in particular, British Columbia, continues to violate our trade rules. The share of timber harvested from public lands in the interior region of British Columbia and sold at extremely low rates has increased dramatically since 2007. For example, much of this government-owned timber has sold for 25 cents per cubic meter, whereas equivalent quality logs can cost an estimated $20 per cubic meter in the open U.S. market. As a result, a truckload of logs in Maine might cost a mill roughly $2,700, while that same load might be as cheap as $15 in British Columbia. At a time when the economy and unemployment in our state continues to suffer, these artificially underpriced foreign imports have undercut Maine producers in the U.S. market and put tremendous strain on American sawmills and forestry workers.
In response to such egregious trade violations, I have championed policies to level the playing field for American workers. In February 2009, when President Obama met with Prime Minister Harper in Ottawa, I urged the President to object forcefully to Canada’s repeated and worsening violations of the 2006 Softwood Lumber Agreement, and since then the Office of the U.S. Trade Representative, the Obama Administration’s trade policy arm, has been examining whether British Columbia’s timber price reduction policies are in violation of the 2006 trade pact. In July, after it was clear that Canada had not sufficiently addressed these concerns, I called the President’s top trade advisor, Ambassador Ron Kirk, and requested that he use the agreement’s dispute resolution process to ensure Canadian compliance with our trade rules.
After months of delay, the Administration finally announced on October 8th that it has requested consultations with Canada under the 2006 agreement. If the consultation process fails, our government then has the right to initiate arbitration proceedings and put a halt to these violations.
These latest developments represent progress – but time is of the essence. Our government must use every tool in its arsenal to fight for what is fair when it comes to British Columbia’s efforts to circumvent the Softwood Lumber Agreement. These jobs are the very heart and soul of many communities in our state, and it is imperative that our government restore credibility to our trade relationship with Canada by remedying the harm done to the American lumber industry and the families and small towns it supports.
