NAFTA- Softwood Lumber

Canadian counterparts of softwood lumber in the U.S. say that Canadian lumber is being subsidized. Though the Canadian government does not offer the softwood lumber industry monetary assistance, it does offer them an advantage that American suppliers do not get: the stumpage fee policy. Stumpage “fees are actually royalties that t

† As stated in Globe and Mail, May 3 2002

Furthermore Canada has been accused of “exporting their unemployment to the U.S.”, [pg 22 News in Review] this stems from the belief by some that Canada uses its softwood lumber industry as an unemployment strategy. The reduced cost to produce softwood lumber in Canada allows for continued production when demand is low because it can be sold in the U.S. below the American cost of production guaranteeing a need for workers.

he public collects when logging takes place on its land. They include the cost of the government’s monitoring of forest activities, the replacement of harvested trees and conduct of forest research” [pg 24 – News in Review]. In the U.S. there are 200 million hectares of forested land, 64% of which are privately owned, compared to Canada where there are 417 million hectares of forested land, 6% of which are privately owned, while the remaining 94% percent are Crown land†. American Loggers feel that they are disadvantaged because the land that they harvest on is privately owned and the cost to rent/buy the land is determined at open auction. As for the remaining 72 million hectares of forested land that is not privately owned in the U.S., 62 million of those hectares are “protected from logging because of court challenges brought by environmental groups”. [Pg 25 News in Review] The 5% of Crown land in the States that can be legally used for timbering purposes is so miniscule that it consequently makes it pointless for the U.S. to implement its own stumpage fee.

† As stated in “Wood Technology, May 1998 “Lots of lumber, lower demand forecast at WWPA spring meet”

Rusty Wood - Chair of the U.S. Coalition for Fair Lumber, says that “Canada is selling its resources for pennies on the dollar” making it impossible for American Loggers to compete in the market, he supports intervention by the American government to increase price of imported softwood lumber through tariffs. By upping the price of Canadian softwood lumber, Wood feels that this would place American producers in a more equal position to compete. Yet within the United States there is support for Canadian softwood lumber; it stems from American citizens who are not involved in the business side of lumber, but are the consumers. They argue that they will feel the impact of placing tariffs on imported softwood lumber through increased price for homes and wood products at a time when the United States is already in recession. Jenna Morgan of the Lumber and Building Material Dealers Association states that the U.S. cannot support the demand for softwood while Canada can, making it senseless to restrict trade††.

Some topics in this essay:
American Loggers, NAFTA Canadian, Canadian Lumber, Canada United, Furthermore Canada, SLA SLA, Southern Lumber, Softwood Lumber, Organization’s WTO, Commerce Department, softwood lumber, canadian softwood, softwood lumber industry, lumber industry, softwood industry, trade agreement, privately owned, canadian softwood lumber, 25 review, globe mail, canadian government, national guidelines, hectares forested land, july 26 2002, 26 2002 1,