Words Are Not Enough: Softwood Lumber Demands Immediate Action

September 21, 2005

Canfor Corporation, one of Canada’s largest forest companies providing employment for more than 9,700 Canadians, has had enough.

Until recently, BC’s forest industry has put forth a united “all-Canadian” front in the ongoing softwood lumber dispute with the United States. Yet, once the U.S. rejected a NAFTA ruling that deemed the $5-billion in duties taken from Canadian mills by the U.S. were illegal, Canfor CEO Jim Shepherd stated it’s “time for the debate to be taken to another level.”

Mr. Shepherd said, “It is now time for both Ottawa and Washington to reaffirm their commitment to a rules based trading system and live up to their legal commitments under NAFTA.”

Conservative Party leader Stephen Harper devoted almost all of a major speech in Halifax earlier this month to convey the same message. Like Mr. Shepherd, Mr. Harper believes that, “If the rules are simply ignored, then the very basis of a rules-based trading system threatens to come unraveled, and the future of all Canadian-American trade relations could be profoundly affected.”

This is no longer just about softwood lumber. This dispute threatens the very existence of NAFTA and the $1.2-million in two-way Canada-U.S. trade per minute.

Mr. Harper has repeatedly demanded the Prime Minister actually become engaged in this issue. Yet Mr. Martin still hasn’t even discussed softwood with President Bush. The federal Liberals have infused their relationship with the U.S. with emotion and anti-Americanism, which is counterproductive to Canadian interests.

There’s a difference between legitimate concerns over the U.S. using their economic might to dictate Canadian foreign policy and petty anti-Americanism. Former Liberal Prime Minister Lester Pearson signed the Auto Pact with the U.S. while refusing to support American policy in Vietnam, and Pierre Trudeau reached a deal on cruise missile testing even while opposing many of President Reagan’s policies. The current Liberal administration in Ottawa hasn’t demonstrated similar maturity in U.S. relations.

Mr. Harper suggests Canada immediately dispatch a reputable, high-profile special envoy to Washington to seek a clear commitment from the U.S. to comply with the NAFTA ruling. If the envoy concludes the U.S. isn’t prepared to support our rules-based trading relationship through compliance, then Canada must make other long-term choices in terms of its economic infrastructure.

Retaliation and a trade war would hurt the Americans, but realistically, it’s Canada that would suffer the most. Instead, we must look to other tactics, including expanding trade with other countries and strengthening our partnership with Mexico.

U.S. countervailing duties on Mexican cement are similar to those on Canadian softwood. Perhaps together our two countries can better communicate to the American people that there are thousands of dollars in added costs per home due to the U.S. government’s duties. Without those duties, Canada and Mexico would be in a better position to help Americans struggling to rebuild homes and businesses destroyed by Hurricane Katrina.

Whether it’s a call to the President, a special envoy, a coalition with other governments, or a direct appeal to American citizens, I wholeheartedly agree with Mr. Shepherd, the time is long overdue for Canada to take the softwood dispute to ‘another level’.

-30-