B.C. Forests MInister Doug Donaldson (right side centre) meets with housing ministry officials in Jiangsu province, China, Nov. 15, 2017. The complexities of Asia trade and continued attacks from U.S. lumber producers have spurred B.C. to open a network of Asia trade offices. (B.C. government photo)

Donald Trump’s trade wars hit B.C.’s struggling forest industry

World Trade Organization can’t rule on softwood lumber tariffs

The U.S. government and industry’s trade attack on B.C.’s lumber industry is now nearly four decades old, and prospects are dim that the current round of punitive duties may be overruled by the World Trade Organization.

Even as Canada, the U.S. and Mexico celebrate an updated North American free trade deal, it still doesn’t include softwood lumber. And one of U.S. President Donald Trump’s tactics has been to block the appointment of WTO appeal judges, leaving the appeal panel without a quorum to review the current heavy border tariffs on Canadian lumber as the current terms expired at the end of 2019.

Trump and U.S. Trade Representative Robert Lighthizer have rejected the WTO’s dispute settlement system as unfair to the U.S. Lighthizer told the U.S. Senate finance committee in March 2019 that blocking appointments is the only way he has to force reforms to the WTO, as the Trump administration works toward trade deals with China and its North American partners.

RELATED: Canada signs new NAFTA deal with U.S., Mexico

RELATED: Laid-off forest workers descend on B.C. legislature

RELATED: B.C. to ‘embed’ Asia trade offices in Canadian embassies

The duties continue to be applied as North American lumber prices have slumped over the past year, and market conditions and cutting restrictions have led to a wave of shutdowns across the B.C. forest industry.

B.C. Forests Minister Doug Donaldson recently returned from the latest industry trade mission to Asia, where Chinese demand is also in decline after a peak in 2013 that saw it briefly overtake the U.S. as the top customer for B.C. lumber in B.C.

B.C. continues its efforts to market timber and wood construction across Asia, where Japan is its longest-standing customer and some gains have been seen in Korea, India, Singapore and Malaysia. B.C.’s network of trade offices, which has focused heavily on forest products to reduce dependency on the U.S. market, have been ordered closed, with staff transferred to Canadian embassies and consulates in the region.

As 2020 dawns, the province has also drastically reduced its stumpage rate for Crown timber, after B.C. producers protested that the system wasn’t responding fast enough to the 2019 decline in prices. Provincial stumpage fees for cutting coastal Crown land timber ard reduced to $8.82 per cubic metre as of Jan. 1, in the latest quarterly adjustment. Stumpage reached a high of $18.73 in January 2019.

The WTO has ruled in Canada’s favour in previous rounds, on U.S. claims that buying Crown-owned timber represents an unfair subsidy to Canadian construction materials. The first round was in 1982, and the fifth remains in place at the start of 2020, with the U.S. Department of Commerce imposing countervailing and “anti-dumping” duties across Canada.

The heaviest import duties fall on B.C.-based companies, with West Fraser facing a total of more than 23 per cent. Tolko is penalized 22 per cent and Canfor duties total more than 20 per cent, combining countervailing and anti-dumping penalties.

Quebec-based Resolute is being assessed a roughly 18 per cent duty, and New Brunswick-based Irving is paying just under 10 per cent, based on the U.S. assessment of their log costs.

On the B.C. coast, Mosaic Forest Management laid off about 2,000 union and non-union employees as well as coastal logging contractors at the end of November, beginning its seasonal shutdown early due to what the company termed “very challenging pricing and market conditions.” Mosaic is a partnership of Island Timberlands and Timberwest, which along with Western Forest Products represents most of the lumber industry on Vancouver Island and the adjacent coast.

Western has been shut down for six months by striking United Steelworkers members, forcing logging contractors off the job. Premier John Horgan has promised aid for contractors, who are losing their homes and equipment.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Exploding enrolment prompts opening of second TWU campus in Richmond

Langley’s faith-based Trinity Western University opens a second campus in Richmond

Woman in Fraser Health region confirmed as sixth COVID-19 case in B.C.

Woman remains in isolation as Fraser Health officials investigate

Fraser Valley imports, exports slowed down by Aldergrove border hours: Langley chamber

Greater Langley Chamber of Commerce lends a helping local businesses thrive in new markets

Number of community garden spaces growing as interest rises in Langley

Langley Environmental Partners Society will unveil newest garden at Douglas Park in coming weeks

Photographers wanted to capture the facets of Langley heritage

Photo contest, open until May 4, has three categories; buildings, landscapes, and people

Blair says RCMP have met Wet’suwet’en conditions, calls for end to blockades

The Wet’suwet’en’s hereditary chiefs oppose the Coastal GasLink project

Woman missing out of downtown Maple Ridge

Police seek public’s help locating Atefeh Jadidian

Petition seeks to remove local police department from Lindsay Buziak murder case

American woman starts online petition in hopes of helping Buziak family

Health officials confirm sixth COVID-19 case in B.C.

Woman remains in isolation as Fraser Health officials investigate

Study says flu vaccine protected most people during unusual influenza season

Test-negative method was pioneered by the BC Centre for Disease Control in 2004

Saskatchewan and B.C. reach championship round at Scotties

British Columbia’s Corryn Brown locked up the last berth in Pool B

‘Chain reaction pile up’ closes southbound traffic on Coquihalla Highway

Black Press Media has reached out to RCMP, paramedics for details

Fraser Valley seniors’ home residents go without meds for a night due to staff shortage

Residents speak out about staff shortages that are leading to serious safety concerns

B.C. lawyer, professor look to piloting a mental-health court

In November, Nova Scotia’s mental-health court program marked 10 years of existence

Most Read