N.H. industry sees hope in extended lumber deal

The United States and Canada have announced a two-year extension of the Softwood Lumber Agreement, which those in New Hampshire’s lumber industry say is good news.”Most everybody that I know that’s producing softwood lumber right now would think it’s positive,” said B. Manning, sales manager at Durgin & Crowell, which has manufactured eastern white pine lumber in Springfield since 1976.Under the deal, the Softwood Lumber Agreement, which was due to expire in 2013, will remain in effect through October 2015. It was originally enacted in 2006 to put an end to a divisive and ongoing trade dispute between the two countries.The dispute stemmed from the claim by those in the American logging industry that the Canadian government was unfairly subsidizing its timber. Most Canadian timberland is owned by provincial governments, which were charging private firms low fees to log on government land.In response, the U.S. instituted a 27 percent fee on imported Canadian timber in 2002.In 2006, the two countries reached an agreement, under which the U.S. agreed to stop imposing duties on Canadian lumber, and Canada agreed to an export tax to offset the subsidies when prices dropped below a set amount. As part of the deal, the U.S. also agreed to return about 80 percent — or $4.5 billion — of the duties it had collected since 2001 to Canadian exporters.Still, the agreement has not been without disputes. In 2011, the London Court of International Arbitration found that Canada had breached the terms of the agreement when Ontario and Quebec offered provincial assistance programs to support the softwood lumber industry.Also last year, the U.S. announced it was seeking nearly $500 million in damages on charges that the British Columbia government broke the trade agreement by classifying timber that had been damaged by a beetle infestation as salvage, which sells for 25 cents a cubic meter.”They’re selling that wood at a pittance,” said John King, owner of King Forest Industries in Wentworth. “They reclassified tremendous quantities of wood. It’s just a way of skirting the agreement.”That dispute is expected to go to arbitration next month.King said it was good news the extension was in place, but expressed frustration at the length of time that it takes to arbitrate the disputes.”We need our country to enforce our trade laws,” said King. “We can deal with anybody that’s doing things the way they should be doing it, but we can’t compete against the Canadian government.”Despite these disputes, the agreement is one that has benefited both countries, said Manning.”The agreement adds certainty, stability, to the business in a very uncertain economic environment, and I think that prior to the agreement, nobody really knew exactly where they stood,” he said. “When the two countries came together on an agreement of this magnitude, it adds stability and a certainty to business, which is good for everybody.”The two-year extension buys the countries some time to discuss what changes may be made to the agreement down the line, said Manning.Both countries have also agreed to a commodity check-off program, which would act as a marketing arm for all of North American softwood lumber, similarly to the “Got Milk?” program that promotes the dairy industry as a whole.”I think there’s more positive than negative things going on at the moment,” said Manning. — KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW

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