I agree with the recent decision of the White House and the Commerce Department to impose anti-subsidy duties against Canada’s unfairly traded softwood lumber imports. This belated enforcement of U.S. trade laws will help millions of private timberland owners, American forestry workers and members of their local communities by leveling the playing field in the timber industry.
Timber sales are a major source of income for my own family, and we have suffered financially for many years from an unfair advantage enjoyed by our major competitor in this vital market.
With moderate adjustments in management, there is enough timberland in the United States to supply the total American market with lumber. Without adjusting any U.S. timber policies, and if we are able to compete on a level playing field against Canada, our production of lumber could satisfy more than 84 percent of total U.S. demand, according to Western Woods Products Association data. This would leave the remaining 16 percent to be supplied by imports, but now about 32 percent of our lumber is being imported from Canada.
Canada enjoys an inherent advantage in that the vast majority of its standing timber is owned by provincial governments, which are free to dump their timber at practically no cost in order to stimulate their forest industry. At the same time, most of America’s timber is privately owned, and market forces impose a minimum price at which farm owners can continue in business.
There has been a long-lasting dispute about importing Canadian softwood, which has gone through an increasingly crucial phase during the past 35 years. About 70 percent of Canada’s softwood lumber exports came to the United States in 2015. One indication of the recent changes in market forces is that the number of Canadian-owned sawmills in our country has exploded to more than 40 in the past decade – partially because of lower labor costs in the United States.
The latest Softwood Lumber Agreement expired on Oct. 12, 2015, and Canadian producers now have almost unrestricted access to the U.S. softwood lumber market.
Last month, the Trump administration announced plans to impose average duties of 20 percent on most Canadian lumber, charging that these lumber companies are subsidized by the government. To remain in effect, however, the duties need to be finalized by our Commerce Department and then confirmed by the U.S. International Trade Commission after an investigation that includes testimony from both sides. This enforcement of U.S. trade laws is consistent with our international commitments.
The members of my family own about 1,800 acres of timberland, and the softwood (pine) tracts are mostly planted as seedlings (from 550 to 900 per acre) that even in our warm climate need to grow for at least 25 years before becoming large enough to sell for lumber. Unless in urgent need of cash income, we usually wait at least 10 additional years before harvesting and replanting. After this 35-year period, we sell our softwood timber – usually less than 100 acres a year – in a competitive and open process to Canadian sawmills to make lumber.
With logs selling at the present price of $25 per ton, we can expect to realize a net income of about $875 per acre, or just $25 a year over 35 years, plus some secondary income for pulpwood and other products.
Largely because of Canada’s unfair trade, the prices we receive today are the same as when I was in office over 35 years ago, although expenses from planting seedlings, thinning, removing unmarketable trees, periodic controlled burning and timber severance taxes are much greater.
While there are many benefits to a harmonious bilateral relationship between the United States and Canada, our neighbor to the north must still play by the rules and stop engaging in its unfair trade practices. We must either enforce U.S. trade laws with tariffs or insist on an effective and lasting bilateral softwood trade agreement that allows our industry to survive, provide jobs for workers and sustain vibrant forestry communities across our country.
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