Timber producers in Canada and the US are preparing for job losses and plant closures in the looming trade war predicted to follow the lapsing of the Softwood Lumber Agreement (SLA) at the end of March.
The agreement’s expiry on March 31 is set to bring to an end five years of peace between the two countries’ lumber industries, traditionally at loggerheads over claimed subsidies paid to Canadian producers.
The agreement gives Canada an annual duty-free US sales quota of 14.7 billion bd ft. The end of the agreement is thought likely to herald border duties for Canadian lumber of on average 13% of the sales value, translating into more than C$1bn added to Canadian producers’ costs during a full year.
Bob Plecas, president of the British Columbia Lumber Trade Council, said: ‘We know that we are going down a road that’s going to cost us millions of dollars. We’ll take the pain for the three or four years it will take.’
The US lumber industry has told president Bush that the ending of the SLA would mean an influx of cheaper Canadian timber, threatening 20,000 US mills and 700,000 jobs.
A group of 51 US senators has written to the president demanding a tax of at least 20% on Canadian lumber. The letter claims that the US industry could not withstand the expiration of the SLA without protectionist measures.
In a separate move, US timber lobby group the Coalition for Fair Lumber Imports plans to take Canadian producers to court if, as expected, the US/Canada Softwood Lumber Agreement lapses.
The coalition is to file a countervailing duty case on April 2 and take out anti-dumping suits against named Canadian producers should a replacement fail to be negotiated.
