Lumber debate seen as dysfunctional, broken down

BANGOR – While ranking officials on both sides of the U.S.-Canadian border talk of ending a decades-old softwood lumber dispute, one consultant familiar with the proceedings was less optimistic and said Wednesday that the process remains dysfunctional and has broken down.

Complex, divisive and further complicated by changes in the global marketplace, there is no easy solution to the issue of softwood lumber trade between the two countries, Lloyd Irland, a forest industry consultant, told about 45 people attending the second annual Canadian-American trade workshop at Bangor Savings Bank’s G. Clifton Eames Learning Center.

“We are going to be at this for years to come, and workers, mill owners, landowners and communities that have done nothing wrong are going to suffer,” said Irland, who has served as a resource for officials on both sides of the border on the issue.

American lumber industry proponents contend that subsidies their Canadian counterparts get through the provincial governments give them an unfair competitive advantage. In response to these concerns, the United States last year imposed tariffs averaging 27 percent on softwood imports from four Canadian provinces. Irland said a measure being proposed in Congress would boost the tariffs to about 45 percent.

Last month, the Bush administration pressed Canada to adopt American forest practices and proposed that Canada open bidding on cutting rights for lumber with the idea the bidding would increase the price.

But Irland, an adjunct professor at the University of Maine, said that because of the way the industry is set up in Canada, trying to make a carbon copy of perfect competition would be impossible.

There were other concerns about the logging trade. In what he said could be embarrassing to U.S. claims of subsidized stumpage in Canada, Irland said Canadian firms are paying higher prices for logs than Maine lumber mills and then the Canadians are selling back the milled logs to U.S. companies.

In another twist, Irland said that while Americans complain about the subsidies, some here may have received Small Business Administration loans, something akin to the subsidies the Canadians are criticized for receiving.

Complicating matters is that half of the 7 million acres of industrial timberland in Maine is owned by Canadian companies, and U.S. restrictions would be tantamount to telling the Canadian logging companies that they can’t take logs they own in Maine back to Canada.

Despite their differences, the American and Canadian logging and lumber industries have something in common: the threat of competition from outside North America.

While forecasters are predicting that U.S. consumption of lumber will be significant in 2003, Irland said there already are indications of the penetration that foreign lumber and related products have made. During a trip to a national home renovations store in Augusta, Irland said he found an $80 bifold closet door from Chile but none made in the United States. There was a more traditional closet door made in the United States, but that cost $250, he said.

Unheard of five or six years ago, lumber products from Sweden and New Zealand are making their way to the United States.

Developed by the Canadian-American Center at the University of Maine and the Maine International Trade Center, the seminar drew people involved in financing, economic development, academia and engineering and included officials from New Brunswick and the Canadian consulate in Boston. The program was sponsored by Eaton Peabody.