Whether they’re talking greenbacks or greenbelts, loggers and environmentalists rarely see the world through the same colored glasses. However, this week’s demise of a trade agreement between the United States and Canada presents a rare opportunity for environmentalists and the timber industry to stray beyond their usual comfort zones and consider how the goals of their political opponents might serve their own interests as well.
March 31 marks the expiration of the 1996 U.S.-Canada Softwood Lumber Agreement, which has regulated the amount of duty-free timber Canada can export to the United States each year. Under the agreement, Canada has been free to ship 14.7 billion board feet annually into the U.S. duty-free, with tariffs imposed on shipments that exceed that level.
To put that figure into perspective, 14.7 billion board feet represents more than five times the amount of timber cut annually in all U.S. national forests, or about 15 times as much lumber produced in Montana each year. Imagine 4 million logging trucks lined up bumper to bumper encircling the globe, carrying enough wood to build more than 14 million homes.
Even with the agreement, American mills have long complained that they are not competing on a level playing field with their heavily subsidized Canadian counterparts, since the provincial governments of Alberta and British Columbia, which own their forests, set timber prices at one-quarter to one-half of its actual market value. And since Canadian timber licensees are required to cut trees regardless of what global market conditions dictate, that lumber is often dumped south of the border, with 80 percent of all Canada’s forest products ending up in U.S. markets.
Environmentalists in both countries have been howling for years about Canada’s logging practices, which are far less regulated than in the United States. At least 90 percent of Canadian logging is done in virgin, old-growth forests using clear-cut methods prohibited in this country. Canada also has no endangered species protections and few regulations to protect fish or water quality.
As a result, environmentalists say, massive deforestation in Canada is destroying the habitats of endangered species that the United States spends millions of dollars each year to protect, such as grizzly bear, bull trout, salmon and caribou.
“We’ve jokingly told our counterparts in Canada that the best thing we could do would be to send the Canadian Sierra Club wads of money so they could become more effective in their activism,” says Cary Hegreberg of the Montana Wood Products Association.
While Montana’s timber industry prefers to blame its fiscal troubles on environmentalists rather than globalization, the federal government now formally acknowledges that NAFTA—the North American Free Trade Agreement—is largely to blame for the loss of more than 500 jobs in Montana’s timber industry. The U.S. Department of Labor (DOL) has certified at least a half-dozen mills in Montana—including Pyramid Mountain Lumber in Seeley Lake, Stimson Lumber in Bonner and Owens and Hurst Lumber in Eureka—for NAFTA Transitional Adjustment Assistance, which assists workers whose jobs or work hours have been lost to Mexico or Canada retrain, return to school or relocate for new jobs.
In her investigation of Pyramid Lumber’s application for assistance in December, Linda Poole of the DOL’s Division of Trade Adjustment Assistance determined that “[i]ncreases of imports from Canada contributed importantly to the declines in sales of production and to the total or partial separation of workers at [Pyramid]…The investigation also revealed that major customers increased their reliance on purchases of lumber produced in Canada, while decreasing purchases from [Pyramid].”
Montana’s wood products industry has called on Montana’s congressional delegation to take swift action against the Canadians, especially if they step up their exports to further erode American market shares once the trade deal expires.
In a letter to President Bush from Sen. Max Baucus (D-Mont.) signed by 53 senators from both parties, Baucus writes, “The U.S. lumber industry faces a continued crisis this year with lumber prices collapsing nearly 33 percent and subsidized shipments from Canada growing to record levels. In the past six months, such conditions caused approximately 100 mills across the U.S. to close with attendant losses in employment.”
Still, it would be premature to predict that environmentalists and American mill owners—who would both prefer to see less Canadian lumber on American shelves—will enjoy a cozier relationship anytime soon. Even as a glut of wood products on the world market drives down timber prices, Montana’s wood products industry continues to blame environmentalists for reducing supply and driving up production costs.
“I think it’s safe to say that for every tree that we have not cut in Montana’s national forests, there’s been a tree cut in the provincial forests of Alberta or British Columbia,” says Hegreberg. “Consumption of wood and building products has not diminished. It’s simply a matter of where that supply is coming from.”
But environmentalists like Matthew Koehler of the Native Forest Network note that it’s not weaker environmental laws that are driving multinational companies to log in Russia, Chile and Argentina, but abundant and more valuable old growth forests. Koehler warns that if the Free Trade Area of the Americas—often called a “super-NAFTA” for the Western Hemisphere —is approved next month in Quebec, it will further injure Montana’s already beleaguered timber industry.
Moreover, Canada has made it clear that it will not renegotiate the Softwood Lumber Agreement and has petitioned the World Trade Organization to block the United States from imposing new trade sanctions on Canadian lumber. A ruling is expected in several weeks.
“This is the race to the bottom we’ve been talking about,” says Koehler. “We could see what we’ve been warning about all along. Our environmental rights, our rights as a country, our worker rights, are being undermined by this international trade body that no one elected.”