Canadian Softwood Lumber Dispute

The Forest Landowners Association (FLA) believes the Canadian federal and provincial governments have engaged in subsidizing softwood lumber production, and then dumping that subsidized lumber into the United States. FLA supports efforts to end the practices of subsidy and dumping by the Canadian federal and provincial governments regarding softwood lumber, and we encourage further negotiation between the Canadian and U.S. governments toward this objective. However, barring such a resolution of the problem, FLA supports any and all remedial measures that may be necessary to protect the U.S. private forest landowner and the U.S. lumber industry from subsidy and dumping, including (but not limited to) the imposition of countervailing and anti-dumping duties by the U.S. government upon lumber imported into the United States from Canada and its provinces.

With the expiration of the 1996 Canadian-United States Softwood Lumber Agreement on 31 March 2001, private forest landowners are being forced to examine the impact of subsidized Canadian softwood lumber being dumped upon the U.S. market. Such practices not only undermine the principles of free trade and cooperation between the two nations, but also seriously threaten the very viability of the U.S. lumber industry and the holdings and investments of private forest landowners. Even under the restrictions of the 1996 agreement, Canadian imports of softwood lumber have consistently increased (with 18,333 MMBF imported into the United States in 2000). At the same time, the Coalition for Fair Lumber Imports reports that 160 sawmills in the United States have closed, with 27 of the closures permanent. (In comparison, only two permanent Canadian mill closures have been reported.) The mill closures present a direct threat to the financial viability of private forest landowners across the nation, through the economic laws of supply and demand. If U.S. mills continue to close, the demand for lumber from private forest landowners will decrease. This will result in one of two things. If private forest landowners continue to produce at current levels (thereby keeping the supply side of the economic equation constant), then prices for those supplies will have to be reduced in order to meet the reduced demand from fewer mills.If private forest landowners, however, want to keep prices at current levels, then they will have to reduce the supply of lumber that is available on the market for the reduced number of mills. In either case, the value of the private forest landowner's investment will be reduced, and will lead to financial hardship for many landowners and their families and businesses. Therefore, in order to make sure that the private forest landowner is not permanently injured by the practices of the Canadian federal and provincial governments, the Forest Landowners Association believes that the United States and Canadian governments should work to eliminate these unfair trade practices in the very near future, in order to level the playing field and allow true competition to emerge between the Canadian and U.S. markets. Until this point is reached, however, the Forest Landowners Association also supports any and all actions available to the United States to protect the U.S. lumber industry, including the imposition of countervailing and anti-dumping duties upon softwood lumber imported into the United States from Canada.