The softwood war begins
Canada and the United States are the world's largest trading partners, but there's one thing they've never agreed on: softwood lumber. The dispute dates back hundreds of years, but in the 1980s it turned nasty. The U.S. has slapped billions of dollars of fines on Canadian wood, jeopardizing thousands of jobs. The dispute raises serious questions about trade, sovereignty, and the real nature of Canada-U.S. relations.
. Softwood is one of Canada's largest exports to the United States. The American lumber industry cannot meet domestic demand, though it would like to be the first supplier (before imported wood is purchased). Over one-third of all softwood used there comes from Canada.
. In 2001, Canada exported over 18.6 billion board feet of lumber worth $9.4 billion.
. A board foot is the standard unit of volume for wood equalling 144 cubic inches, or one square foot of an inch-thick board. An average tree will yield between 100-300 board feet, depending on the species and age of the trees.
. The sawmill sector employs more than 80,000 Canadians in every province. Two-thirds of those jobs are in British Columbia and Quebec.
. The Maritime provinces use a different system for setting wood prices, and have generally been exempt from the trade war. Wood production in these provinces has skyrocketed in the last decade.
(Statistics: Department of Foreign Affairs and International Trade)
. Canadians and Americans have long disagreed on forest products. New Brunswick and Maine argued over them in the 1820s. Lumber was a key consideration in Canada-U.S. reciprocity talks in 1853, and in trade discussions ever since.
. Today trade disputes like this one are ruled on by international bodies such as the World Trade Organization or binational panels of the North American Free Trade Agreement.
. At the root of the dispute are "stumpage fees." In Canada, most trees are harvested from government-owned "Crown land." The government charges lumber companies a fee to cut these trees. For decades, the American lumber industry has claimed that the fees are too low, amounting to a gift from the government to Canadian companies that gives them an edge over American competitors. (80-90 per cent of U.S. lumber comes from private land, with higher stumpage fees set by market rates.)
. On Oct. 7, 1982 the United States Coalition for Fair Lumber Imports (a coalition of over 350 American lumber producers and associations) filed three petitions with the United States Department of Commerce. The Coalition claimed it was injured by Canadian subsidies on softwood lumber, softwood shakes and shingles, and softwood fence. It blamed Canadian forest management practices and programs for subsidizing Canadian manufacturers, producers and exporters in British Columbia, Alberta, Ontario and Quebec.
. A "countervailing duty" is a special tax applied to imports from another country when the production of those goods is unfairly subsidized (assisted by that country's government).
. If a countervailing duty is applied, lumber companies must pay cash deposits on all shipments at the border. (This money will be refunded if the duty is appealed and ruled illegal).
. The U.S. Department of Commerce investigated, and on May 31, 1983 concluded that no duty was justified.
. "At loggerheads" is a term meaning "in disagreement." A loggerhead was a long-handled instrument with an iron cup or ball, used to melt tar over an open fire. In medieval naval warfare, sailors would use loggerheads to heat tar and hurl or dump it on attacking vessels (Source: Morris Dictionary of Word and Phrase Origins.)
Program: CBC Radio News
Broadcast Date: Oct. 8, 1982
Reporter: Sandra Lewis
Last updated: March 6, 2012
Page consulted on April 2, 2013
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