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Countervailing Duty May Destroy Value-Added Manufacturing in Northern BC
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Prince George, BC –
The President of a Prince George lumber manufacturer says a US countervailing
duty would destroy value-added manufacturing in Northern B.C. John Brink of
Brink Forest Products in Prince George said “The Canada – US Softwood
Lumber Agreement will expire and there is very little chance of a negotiated
settlement replacing it before March 31, 2001. The US based Coalition for Free
Lumber Imports fully expects to file a case of injury on April 2nd seeking countervailing
duties and anti-dumping penalties against Canadian exports of lumber. This directly
penalizes further manufacturing in northern BC.”
Mr. Brink says there appears to be a perception that value-added products are
unaffected by the SLA. “Nothing could be further from the truth,”
explains Mr. Brink. A countervailing duty is a levy or tax placed on the value
of a finished product and as most value-added operators are able to double if
not triple the value of wood products, they may face even higher tariffs. “There
would be no incentive for adding any value in Canada. A countervailing duty
could eliminate value-added manufacturing in northern BC and the industry might
be forced to move south of the border,” he warns.
American lumber producers claim that Canadian lumber manufacturers are unfairly
subsidized. Their claim of unfair subsidization stems from their understanding
of the BC forest tenure system. But this applies to major timber licence holders.
Mr. Brink says that value-added companies that pay full market value for their
lumber, do not hold any timber licences that may be construed as being “subsidized”
and have never received any grants, subsidies or incentives from any level of
government, should be exempt. US trade law allows for such exemption. He says
if the issue of subsidization alluded to by the US stems from forest policy,
stumpage and access to publicly held timber, then it is clear that further manufacturers
do not participate in such programs and therefore should not be deemed to be
subsidized in any manner. Mr. Brink says it appears that nobody in either the
Federal or Provincial governments is listening to his concerns.
“I don’t understand it,” says Mr. Brink, “neither the Federal
nor the Provincial government appear to be doing much about the impending crisis
and are either complacent or in a state of paralysis. Everyone appears to be
sitting back waiting for the axe to fall.” Mr. Brink says the federal government
favours a committee of experts to study the issue further and provide recommendations.
They have challenged some positions under World Trade Organization rules but
the outcome is only expected in several years. The provincial government is
unable to come up with any meaningful solution and the new US Administration
is still trying to figure out what the issues are. “Governments must make
sure that the issues and consequences of any action are well understood and
are brought to the negotiating table,” adds Mr. Brink.
“I have said over and over again that the future of northern BC is in
a vibrant value-added forest industry that is able to utilize the excellent
fibre quality of the north, its strategic location to the markets, its well
established distribution channels and its pool of well trained employees. But
firstly, we must have access to the market,” says John.
“Where are our politicians – and would-be MLA’s?” asks
Brink. He suggests that in the flurry of political activity and election fever
we should have politicians shouting from the rooftops warning of the consequences.
“The silence is deafening and alarming,” says Mr. Brink.
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