Negotiators prepare for U.S. lumber talks

‘We’re not in favour of strict hard-cap quotas,’ Forests Minister Steve Thomson said

B.C. and Canada have a strong position going into the latest dispute over lumber trade with the U.S., which needs imported lumber to maintain growing housing construction, industry and government representatives say.

The U.S. used 47 billion board feet of lumber in 2016 and domestic production was only 32 billion, B.C. Lumber Trade Council president Susan Yurkovich said after meetings with federal trade officials in Ottawa Monday.

Yurkovich said the U.S. wants to increase domestic lumber production, but it can’t do that quickly.

“If you don’t have that supply, what you’re going to have is a massive spike in lumber prices, which is going to push home ownership out of reach for some,” Yurkovich said. “And frankly if it’s so constrained that you push prices high enough, what you’ll bring in is European supply, or you push people to substitute, which isn’t in the best interests of the wood products industry.”

Yurkovich and B.C. Forests Minister Steve Thomson met with Foreign Minister Chrystia Freeland, who is bracing for the reopening of the North America Free Trade Agreement as well as the now-expired side deal that restricted Canadian lumber exports to the U.S.

Thomson said it has been a frustrating two years, trying to get talks going as the system of trade quotas and border taxes was expiring, and so far there is no “common ground” on the issues.

“We have clearly said that we’re not in favour of strict hard-cap quotas,” Thomson said. “We need to look at how we have a market share in the U.S. that is reflective of a historical market.”

The U.S. International Trade Commission has made a preliminary finding of “injury’ due to alleged subsidies to Canadian wood products and the U.S. Department of Commerce is continuing its investigation.

The four largest exporting Canadian companies are responding to U.S. officials, Quebec-based Resolute and three B.C. firms, Canfor, West Fraser and Tolko. Half of Canada’s exports to the U.S. come from B.C.

Billionaire investor Wilbur Ross, President Donald Trump’s pick for Secretary of Commerce, is expected to be confirmed by the U.S. Senate soon. Canadian negotiators await his priorities for trade, which has been a focus for Trump’s foreign policy.

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