UTU works toward a solution

Softwood lumber trade dispute hurts workers on both sides of the border

A delegation of Canadian UTU members traveled to Washington DC to lobby for a quick resolution to the Canada / US softwood lumber trade dispute that will ultimately affect the jobs of thousands of workers in the US and Canada.

Particularly concerned were members of locals 1778 and 1923 representing BC Rail conductors. Eight-six percent of BC Rail's freight originates in the forest industry and with mills along the line closing or threatening to close, UTU members on BC Rail decided to register their views in Washington in order to help bring a quick resolution to the dispute. With the assistance and support the Canadian Legislative Department, the BC Legislative Board and the UTU International Legislative Department, BC Rail members lobbied US legislators for a quick resolution of the softwood trade dispute.

Through the International Legislative office, the UTU can bring strong influence to bear on the most powerful political system on the planet. With the help of US Legislative Director James Brunkenhoefer and staff, and UTU state legislative directors from Pennsylvania, Minnesota and South Carolina, appointments were made with Congressmen and their chiefs of staff, Senators and trade representatives. Teams were assigned, and over five busy days in the US capitol, UTU members made their case.

Prior to departure, the UTU delegation was briefed in Ottawa by Canadian government legislative assistants and trade councilors. Also, the team met with trade councilors at the Canadian embassy in Washington.

The delegation consisted of Bob Sharpe (Canadian Alternate Vice President), Tim Secord, (Canadian Legislative Director), Don Tenant, (Alternate Canadian Legislative Director), Brian Gleason, (BC Legislative Board Chair) and local members Brad Burrows, Sylvia LeBlanc, David Moorhouse and Bill Whitton. State Legislative Directors John Smullen, Don Dunlevy and Jack Ramsey acted as "seeing eye dogs" for the delegation in the miles of legislative office hallways and tunnels on Capitol hill. The delegation was well received. Legislators indicated that it was refreshing to see labour representatives in their offices to get the message out personally and that a Canadian delegation on the Hill was rare indeed!

Background

The US needs our lumber. Canada supplies over 30% of the US lumber market, trading about US$10 billion worth each year. The softwood trade dispute has been going on for over twenty years. Actually, it's been around longer than that. The first act passed by Congress in 1789 was a tariff act which included lumber from Canada. It continues to be the number one trade issue today.

In 1982 the US used softwood as a NAFTA bargaining chip which set in place a system where Canada was prepared to pay a big price for access to the US market.

In 1986, the two governments negotiated a Canadian 15% export tax. In 1996 the tax was replaced by a quota system with a sliding scale on fees. In May 2002, the US imposed countervailing and anti-dumping duties on softwood lumber amounting to 27.77%. However, the latest duties have not had the desired effect. Canadian producers have increased production in order to lower their unit cost and therefore their dumping margins, which are based on production costs. This has lowered the price of lumber across North America.

Negative Effects

On the face of it, lower lumber costs sound like a good thing, but the increase in production can not be sustainable. Sooner or later, mills will no longer be able to afford producing at this level. Smaller, less efficient mills in both Canada and the US will feel the pinch first.

For each job in a mill there are at least thirty downstream-lumber brokers, handlers, builders and remanufacturers. This figure does not include transportation workers, who are also affected.

Home building is one of the few growth sectors in the US economy. Homebuilders find it difficult to operate in a lumber market disrupted and destabilized by the trade dispute. The price of lumber can swing wildly between the time a house price is quoted and the time ground is broken. This impacts affordable housing, adding between $1000 to $1500 to the cost of a new home.

Cedar, which is not even in direct competition with construction grade softwood is inexplicably lumped in with spruce, pine and fir. Already expensive, cedar is becoming unaffordable and hard to get. Cedar mills are closing.

Lumber exports to the US have decreased 6% over the same time last year. At the same time, lumber is being shipped in from Latvia and Scandinavia tariff-free. Swedish exports to the US are up 100%. Consequently, rail traffic patterns could shift from one side of the continent to the other, affecting crew logistics and planning.

What we did

The delegation approached legislators with the answers to questions we imagined they'd ask: Why should I care? What's in it for my constituents? What do you want me to do?

The answers for the first two questions can be found above, and we asked them to:

• Press for a resolution through negotiation with the parties (Governments, industries, consumers)
• Reconsider the 27% countervailing and dumping duties to more effectively address the artificially depressed pricing
• Continue to move forward with discussions with Canada on processes such as the proposal for "Changed Circumstances Review" for forest management programs
• Co-sponsor the Senate Concurrent Resolution 135 and HR Resolution 454 supporting fair trade
• Raise this issue with the US trade representatives, the Department o£ Commerce and the Administration with a view to resuming negotiations to address the negative effects of the duties and moving the industry on both sides of the border closer to an integrated North American market.

What do we do now?

In the weeks ahead, the delegation plans to follow up on their visits with letters and emails to US legislators and with further news releases to the membership.