mulberry blenheim NAFTA fight could rock timber industry
lumber producers like a Trump administration move to drop part of the North American Free Trade Agreement’s dispute resolution system they say handcuffs their ability to fight unfair Canadian timber sales.
But Canadian timber analysts warn the move could further muddy a wood market already clouded by political maneuvers. Lumber Coalition spokesperson Zoltan van Heyningen wrote in an email Tuesday. industries and workers.”
NAFTA’s Chapter 19 provides a case by case negotiating court where governments can argue legal claims about unfair trade practices. Department of Commerce believes Canada’s federal government unfairly subsidizes wood harvested from its national forests, giving Canadian sawmills an advantage when they export the finished lumber to the United States. buyers. But their case alsomust pass the Chapter 19 panel to be internationally binding.
“The NAFTA dispute mechanism is unlike any other mechanism or trade agreement we’re party to,” van Heyningen said Tuesday. law. and two Canadian members, with a tie breaking fifth member chosen by coin toss.
Van Heyningen argued that system still hurts the United States because the panel members aren’t government trade officials. They come from a pool of private trade lawyers and professionals who, van Heyningen claimed, too often have conflicting loyalties to foreign clients.
“They almost always side against the United States,” van Heyningen said. homebuyers. dropping further, the way is paved for an increase in imported lumber from Europe, Russia and other countries and at higher prices,” Taylor wroteTuesday. sawmills and timberland owners, but with the consumer (and Canadian mills) paying for it.”
According to Taylor’s analysis, the United States’ main timber source in the Southeast region has more trees than it can mill. That has kept log prices there down at a time when lumber prices for construction are rising. West, according to Taylor,
because log exports to China and Japan have kept log prices up. He reported that Douglas fir sawlogs in the West were selling for $658 per thousand board feet, compared to $178 per thousand board feet for southern pine sawlogs. will need more Canadian lumber, so we anticipate that higher prices will begin to allow curtailed mills to restart,” Taylor wrote. will need rising imports if not from Canada, then from Europe and the Southern Hemisphere and this means high prices for both logs and lumber.”
Softwood includes tree species like pine, fir and spruce traditionally used for construction. From 2006 to 2015, the United States and Canada used a Softwood Lumber Agreement to manage imports and exports across the border. The now expired treaty set import taxes for various levels of Canadian lumber shipments into the United States. Lumber Coalition and the Trump administration now propose a quota limiting the amount of lumber allowed to cross the border, with high tax penalties for any shipments above the quota. lumber supply. lumber comes from private timberlands, with about one tree in five coming from public land such as national forests. Several measures are before Congress to open up more federal forest to timber harvest.
“The consumer isn’t affected at all,” van Heyningen said. “It just means the Canadian producer can’t enjoy the subsidy as much, and the home builder can’t benefit from subsidized lumber. Taylor knows in a heartbeat the math doesn’t add up.”
“The mills in Washington and Oregon in particular are not making much money,” Taylor said. “With the log supply tight, they’re getting better returns selling to China and Japan. From the facts I’ve got,
it tells me a different story.”