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.

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

Just Posted

Prolific South Okanagan criminal will be freed for time served

Afshin Ighani pleads guilty to assault charges but will be set free for time served

Two-month-old Kelowna boy diagnosed with rare heart disorder returns home from treatment

Arel spent two weeks at B.C. Children’s Hospital in Vancouver after suffering multiple cardiac arrests

Waste transfer station now open at Apex Mountain

The site comes after more than a decade of consultation.

City of Penticton names new director of development services

Blake Laven replaces Anthony Haddad as director of development services.

Australia Day fundraiser at Penticton’s Slackwater Brewing a success

Money raised at Australia day party donated directly to Victoria Bushfire Relief Fund

WATCH: Cougar caught on doorbell cam in Vernon

Glenn Gorham shares footage of late-night visit from wild cat

Missing Vernon man possibly sighted in Lower Mainland

Information leads family, friends to believe Jay Rosenberger near Lower Mainland Saturday

House fire quickly knocked down in South Kelowna

According to Kelowna Fire Department, the house sustained interior damage during the blaze

Sap thief taps Saanich park maple trees, faces hefty fine

One tree found with four taps in Mount Doug Park

B.C. reports first coronavirus in Vancouver region

First patient visited Wuhan, China, reported symptoms

Shuswap man given six months jail time for possession of child pornography

Forty-six-year-old will be on National Sex Offender Registry for 20 years

Museum digs up history for ’60s Vernon Winter Carnival

Get Groovin’ with the Grandkids or flashback to the ’60s with tunes, trivia and costumes

Power outage at Big White

It’s unknown why the power went out Tuesday afternoon

Uber threatens legal action to ‘defend its right’ to operate in Surrey

‘I have no concerns,’ Mayor Doug McCallum replies

Most Read