Fears Commerce Department Proposal Would Take Years
NASHVILLE, Tenn., July 30 /CNW/—The following statement is from the Paper, Allied-Industrial, Chemical & Energy Workers (PACE) International Union; International Association of Machinists and Aerospace Workers, Woodworkers Department (IAMAW); American Federation of Labor-Congress of Industrial Organizations (AFL-CIO); Communications, Energy and Paperworkers Union of Canada (CEP); Industrial, Wood and Allied Workers Union of Canada (IWA); and the Canadian Labour Congress (CLC).
Four labor unions and two labor federations from the U.S. and Canada provided direction for a new Canadian timber pricing plan to settle the long-running Softwood Lumber trade dispute in comments filed today with the U.S. Department for Commerce. The proposal came in response to the request of the Commerce Department for comments on its own approach to end the trade cases. The union proposal presents the only multi-party, cross-border agreement on a solution by any of the principal parties to the dispute.
These unions represent tens of thousands of workers in logging and lumber mills in Canada and the U.S. Thousands of workers on both sides of the border, union and non-union, have lost their jobs in the dispute since the cases were filed. Both U.S. and Canadian workers continue to lose their jobs as the litigation and appeals remain unresolved.
Litigation provides no real solution to stop the job losses and
disruption to logging communities on both sides of the border,
said Keith Romig, spokesman for PACE, which was one of the original
petitioners in the cases.
We have provided a North American
solution that doesn't cut jobs in one country to save those in the
other. Enough is enough, Romig stated.
The central dispute in the trade cases is the U.S. assertion that the Canadian provinces charge too little to cut logs in their forests, which is a subsidy for the lumber cut from the logs and exported to the U.S. The provinces own most of the forests in Canada, and Canadian softwood lumber now holds over one-third of the U.S. market. This dispute has been running for over twenty years. Previous settlements based on quotas have collapsed.
The unions proposed that the U.S. and Canadian governments agree to use a timber pricing methodology, which was proposed by the Commerce Department as a long-term solution, on an immediate, interim basis to assist the Canadian provinces to raise timber prices to adequate levels. The Commerce Department proposal required that each province first eliminate a list of timber harvesting programs designed to support the industry in Canada, and to create new, market-based systems to convert government pricing to auction sales, or by setting government prices in reference to private sales in Canada or the U.S.
The unions expressed concerns that the proposal to eliminate all these programs was running into strong political opposition in Canada, and would take years to accomplish, at best. The unions are also concerned that abrupt elimination of these long-running programs will cause serious disruptions, job losses and hardships on both sides of the border. In addition, if only one or two of the provinces, but not all of them, eliminate these programs, then trade distortions will be created between these provinces free of subsidy duties or export taxes and those provinces for which they will be continued. Those distortions will immediately be transferred across the border to the U.S.
The two governments are also discussing an immediate replacement of the U.S. duties on Canadian lumber imposed in the trade cases with an export tax administered by the Canadians. This union coalition had previously suggested a graduated export tax on lumber that would decrease as lumber prices in the U.S. went up, and vice versa. The two governments and their respective industry representatives, however, are reportedly discussing an export tax based instead on quotas, and a limitation on market share for Canadian lumber in the U.S. Quota systems inevitably break down as distortions set in. That was the fate of the last quota agreement on softwood lumber between the two governments. Taxing lumber exports still does not address the core issue, which is the price charged to cut the trees.
The union comments concluded,
The [Commerce Department] Policy Bulletin now provides the means to develop a reference pricing model for the provinces to use on an interim basis to adjust their prices for timber sales to ensure that they receive adequate remuneration. We are proposing that this reference pricing model be established as an interim step, and that the two federal governments agree on a process to review such prices to ensure that they reflect adequate remuneration to the provinces. These prices could be phased in and offset the export tax on a pro rata basis, to minimize the inevitable disruption from such taxes, particularly if they are based on quotas.
With adequate timber pricing systems in place, provinces should be allowed to address any changes in other timber programs, as and when they determine. Both governments could cooperate to establish more market alternatives for reference prices, and to ensure that the timber prices ‘equilibrate’ timber valuations on a North American basis. We also proposed creation of a U.S.-Canadian bilateral panel to develop joint marketing plans for North American wood products to increase the size of the North American market, and to develop new markets to increase exports of North American wood products. We believe this would provide a sustainable, and long-term resolution to this dispute. It provides the basis for a specific and enforceable bilateral trade agreement between the U.S. and Canada.