New softwood deal is not free trade

[CHIMO]

When the softwood lumber deal was announced earlier this year, the powers that be told us that it was a negotiation. And we were told that, in negotiations, you sometimes have to give up a few things in order to get the deal done.

That’s understandable. With the softwood lumber deal, there were some saw-offs (pun intended). They were necessary to get the deal signed. But, once it was signed, we were told we’d have an agreement in place for seven years. We would have seven years, at least, of trade peace with the U.S. on softwood lumber.

As the details surfaced, which is where the devil always lies, we found out what we had to give up in order to end the trade war on softwood. We would have to give up sovereignty on determining our forest policy. Cariboo-Prince George MP Dick Harris said it was the price we had to pay.

“The agreement attempts to make a long-term peace with softwood and try and retain the long-term duties . . . The U.S. doesn’t want the provinces making any changes to forest policy (that would constitute a subsidy). In return they won’t launch any more actions against Canadian lumber producers,” Harris said back in May.

http://www.abbynews.com/portals-code/list.cgi?paper=38&cat=48&id=690779&more=

[CHIMO]

1. Deal Opposed

The softwood lumber deal being championed by Prime Minister Stephen Harper would translate into significant mill and plant shutdowns in Eastern Canada, a leading forestry sector analyst says. In a report titled The Bad and The Ugly, BMO Nesbitt Burns analyst Stephen Atkinson also contends the agreement, signed on Canada Day by Harper and U.S. President George W. Bush, would effectively give U.S. companies veto power over provincial forest polices. "Given that the Canadian government has capitulated, we believe the industry will eventually be forced to follow suit. The industry cannot fight its own government as well as the U.S. government," Atkinson wrote. The 81-page softwood lumber agreement "appears to be a list of U.S. requirements for Canada, as opposed to a negotiated agreement." Atkinson said that should the current agreement win Parliament's approval, he would expect forestry sector shutdowns.

http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=9702234b-fc4a-4589-920f-56162a59e15f

[CHIMO]

2. Lumber deal means closings

The 81-page softwood lumber agreement "appears to be a list of U.S. requirements for Canada, as opposed to a negotiated agreement" and reinforces this investment strategy "to minimize exposure to Canadian Paper and Forest Products assets and invest in Canadian firms with a significant portion of assets in the U.S," Atkinson wrote.

"You could easily see a further 10- to 20-per-cent reduction .... over the next few years in eastern Canada," he said.

Capacity - and manpower - cuts would be felt in the pulp and paper business as well as the lumber business because "when you knock out a lumber mill, you knock out the (wood) chip supply" that feeds pulp mills, he said.

Furthermore, value-added products like engineered wood would be taxed at the full value of the product rather than on the lumber in them, Atkinson said. As a consequence, "jobs will go south" because it will be cheaper for "remanufacturers" to ship lumber to the U.S., and make their products there, he said.

http://www.canada.com/montrealgazette/news/business/story.html?id=685e4bf2-a748-403f-b2ae-fa6ea3485634