United States picks international trade fight with Canada over softwood lumber

Published: Tuesday, January 18, 2011, 8:11 PM     Updated: Tuesday, January 18, 2011, 8:11 PM

 By Richard Read, The Oregonian 

Randy L. Rasmussen, The OregonianThe United States contends Canadian timber policies violate a 2006 agreement and harm Pacific Northwest mills like Seneca Sawmill Co. in Eugene, which processes Douglas fir into lumber.

 The United States aims to take Canada to the woodshed over what trade officials contend is under-priced British Columbia timber that unfairly competes with U.S. lumber companies and workers. 

U.S. Trade Representative Ron Kirksaid Tuesday the Justice Department would file for arbitration under a softwood lumber agreement signed in 2006 after years of disputes. Kirk said British Columbia was selling timber harvested from public lands for prices below amounts set by the agreement, undercutting mills in the Pacific Northwest and other regions. 

"This type of benefit harms U.S. workers and firms in the lumber industry and is inconsistent with Canada's obligations," Kirk said. "Canada is in breach of its commitments." 

Canadian government and industry officials rebutted the claims. 

"There's no substance to this," said Pat Bell, British Columbia's minister of forests, mines and lands. "We should be working on developing other markets together, like Korea, like China, like India." 

Disputes over U.S.-Canadian lumber trade are as old as the hills. But in this round, the United States contends British Columbia resorts to a new tactic, improperly grading timber as beetle-killed salvage material and selling it for pennies per cubic meter to Canadian mills. The mills turn the timber into lumber sold cheap in America, hurting U.S. businesses and workers, said Steve Swanson, an Oregon lumber producer who chairs the U.S. Coalition for Fair Lumber Imports. 

Swanson, chief executive of Glendale-based Swanson Group, said British Columbia should reverse its practices, charge proper timber fees and levy export taxes to even the playing field. 

"North American lumber producers have curtailed production, closed mills and been forced to let go thousands of workers," Swanson said. 

The Justice Department is requesting a judgment by a tribunal of the London Court of International Arbitration. 

John Allan, president of the BC Lumber Trade Council, said U.S. officials brought the latest action in response to political pressure. 

"It seems to be an attack on how we manage our forests with respect to the mountain pine beetle," Allan said. "They're basically saying, 'You should have left those trees to die on the stump.'" 

Bell, the forests minister, said British Columbia grades timber just as it did before the 2006 agreement. Lumber prices are higher than expected, proving the agreement works, he said. China is also buying lumber, he said, due in part to Canadian marketing. 

Chinese purchases also helped sustain a Swanson mill in Glendale that would have closed as unfair Canadian competition intensified, said Zoltan van Heyningen, the U.S. lumber coalition's executive director in Washington, D.C. 

"Hopefully this case will help enable it to keep open," van Heyningen said. 

--Richard Read