Forestry sector seeks federal aid in contesting lumber trade war

Forestry sector seeks federal aid in contesting lumber trade war

The lumber trade fights between the US and Canada is heating up.

VANCOUVER (Scrap Monster): The lumber trade fights between the US and Canada is heating up. Provincial Chambers of Commerce has noted that forestry companies are getting prepared for a trade war with the US. The Chambers, on behalf of forestry companies, has decided to send an open letter to Prime Minister Justin Trudeau requesting federal support in its fight against US imposition of hefty duties on softwood lumber exported to the US.

The US is expected to come up with new tariffs on softwood lumber crossing the US border starting this spring. Forestry companies need capital to pay for tariffs. At the same time, fighting their case in courts also requires good sum of money. The federal government must commit to loan guarantees to support those companies, said Thunder Bay Chamber of Commerce president Charla Robinson. In the US, the administration leads the court battle, but when it comes to Canada, the forestry companies have bigger role than government in responding to trade cases, she noted. The federal government should fight for free trade in the best interests of the country and the local forestry industry, Robinson added.

Thunder Bay-Superior North MP Patty Hajdu stated that it would continue to press for free trade with its neighbor, by demonstrating the value Canada provides to the US. The government has taken all efforts to reach out to various political and bureaucratic representatives to arrive at an early solution to the crisis. However, Hadju declined to comment on whether loan guarantees would be its preferred path to support industry in the event of renewed trade conflict.

Meantime, Unifor has toughened its stance on the issue. The members from across Canada will meet with Parliament members next week to discuss the government’s approach to trade talks with the US. Jerry Dias, Unifor National President stated that the Canadian administration must not be negotiating trade agreements from a position of fear. Instead, it must ensure a new deal that would benefit the entire Canadian forestry industry. Incidentally, forestry industry in Canada is the third largest export sector, supporting more than 202,000 jobs. Moreover, the sector accounts for nearly one-fourth of the country’s total trade balance, Dias noted.

Unifor further urged federal and provincial administrations to be ready with a contingency plan, in case the US goes ahead with unjustified tariffs. Imposition of tariffs may impact Canadian lumber exporters in a big way. The tariffs, if imposed, are feared to lead to significant job losses, Unifor reminded. For instance, the imposition of combined duty of 27.22% in early 2000s by the US had resulted in almost 15,000 job losses in the B.C alone.

Meanwhile, Cariboo-Prince George MP Todd Doherty is in Washington, leading a 15-member team who is on a three-day visit to hold negotiations with US counterparts on trade deals including softwood lumber. The team comprises of senators and members of Parliament and Canadian Embassy.

The lumber trade dispute between the two countries is dated back to 1982. The two countries had signed a bilateral agreement in September 2006. The original seven-year agreement had an optional provision to extend for a period of two years upon consensus by both parties. Accordingly, the deal which came to an end in 2013 was extended until 2015. As per the terms of the deal, parties were prohibited from engaging in trade actions for one-year grace period, which has already come to an end on 12th October, 2016.

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