US Trade Rep Might Challenge Canada's Media Laws

[Riverwind]

Lumber harvested off of Crown land as compared to private land cost of acquiring the same product is in fact the same as being subsidized by government.

The cost of harvesting timber on crown land is the same as the cost of harvesting timber off private land in Canada. There is no net subsidy - that is the NAFTA panel ruling.

Admit it, Canada is no longer competitive in certain areas of forest products because of lower demand especially for newsprint, plywood and veneer.

Actually the reverse is true. Canadian forest product companies are super competitive because they have invested technology and improve processes when compared to their american counterparts.

Demand for most wood products has shot through the roof thanks to the hurricanes and the iraq war. Demand for new newsprint may be down but that is a completely different marketplace and not relevant to this discussion. You seem to be making up facts to suit your prejudices.

[Drea]

Sparhawk

You wrote- " It is a bit like claiming Chinese products are subsidized because the cost of labour is much less in China."

Not really Sparhawk.

Lumber harvested off of Crown land as compared to private land cost of acquiring the same product is in fact the same as being subsidized by government.

Admit it, Canada is no longer competitive in certain areas of forest products because of lower demand especially for newsprint, plywood and veneer.

If we are not competitive, the tarrif would've killed us off. As it is, our forest companies became more efficient. How else can you explain large new pulpmills opening up in the Norther Interior?

Also, do you know what a stumpage fee is? It is a fee, paid by the company felling the tree, for the privilege of taking the tree.

Along with the stumpage fee, a forest company must also take care of the environment on the woodlot, making sure no streams are damaged etc, clean up the area, and replant it. All expensive endeavors, btw.

The forest co. owner in the states who owns the land can do whatever they want with it with no consequence whatsoever.

[America1]

Sparhawk

You wrote- " It is a bit like claiming Chinese products are subsidized because the cost of labour is much less in China."

Not really Sparhawk.

Lumber harvested off of Crown land as compared to private land cost of acquiring the same product is in fact the same as being subsidized by government.

Admit it, Canada is no longer competitive in certain areas of forest products because of lower demand especially for newsprint, plywood and veneer.

If we are not competitive, the tarrif would've killed us off. As it is, our forest companies became more efficient. How else can you explain large new pulpmills opening up in the Norther Interior?

Also, do you know what a stumpage fee is? It is a fee, paid by the company felling the tree, for the privilege of taking the tree.

Along with the stumpage fee, a forest company must also take care of the environment on the woodlot, making sure no streams are damaged etc, clean up the area, and replant it. All expensive endeavors, btw.

The forest co. owner in the states who owns the land can do whatever they want with it with no consequence whatsoever.

We have a regulatory commission just as Canada does, don't kid yourself. Plus, much of our lumber (60% I believe) comes from tree farms in the south where the have very regimented processes of harvesting.

[Drea]

America1 you have yet to answer the question...

if, as you say, Canada is indeed subsidising our softwood, why isn't there a tariff on raw logs? Why only manufactured wood?

Please answer the question.

Tree farms in southern climates grow Radiata (sp) pine. This tree grows extremely quickly which means it's "rings" are very large and the wood, when it's kiln dried does not maintain it's integrity and is therefore unsuited for building construction -- although it's good for making furniture.

Wood grown in northern climates grows much more slowly, which mean the "rings" are very small making it stronger. An example would be Douglas Fir or Lodgepole pine.

Again... why is there no tariff on those Doug Fir and Lodgepole pine logs? Yet there is a tariff on the 2"x4" made from this wood?

[Leafless]

Sparhawk

You wrote-"Demand for most wood products has shot through the roof thanks to the hurricanes and the Iraq war."

Good, now that you say Canada has found a new source of wealth for lumber it will save me the time of posting links to prove you were wrong concering Canada's growing inability to compete in the lumber industry.

[Drea]

I'd like to read your link Leafless.

North American (Canada and the US) manufacturers are going to have a tough time competing with China, India, the Phillipenes, etc where wages (and therefore manufacturing costs) are much lower. However, the tariff issue really has nothing to do with wages and everything to do with manufacturing efficiency. Canadian producers have HAD to become efficient in order to compete in the face of the American tariff. US lumber companies are less efficient simply because they are protected from real competition.

[Leafless]

Drea

You wrote- " I'd like to read your link Leafless"

Sure-

http://www.sprol.com/?p=171

http://www.ran.org/news/newsitem.php?id=58&area=oldgrowth

[Drea]

Thanks Leafless

I took a look at both links and saved the first one under favorites so my husband can have a chance to review it. I'll also email the link to my dad and bro up north.

Why? Because my father has been a faller in BC since 1950 and knows his stuff. My hubby also works in the forest industry, but on the manufacturing side.

Just because something is on the internet, doesn't make it true.

My family is very involved in forestry, our forest companies are certainly NOT subsidized. Just ask my dad every time he's got to renew his woodlot! Just ask him how many times the stumpage goes UP. Just ask him how much money it costs to maintain the environmental integrity of his woodlot.

Again... why is there no tariff on raw logs? Yet there is a tariff on the 2"x4" ?

No one has yet even attempted to answer this question. Why?

[Leafless]

Drea

Why there is no tariff on raw logs?

There is a reasonable article on this that was printed originally in the Vancouver Sun.

It states log exports are already restricted from private forestland in B.C.

Before private forest owners can export any logs they must first offer them for sale in B.C. at domestic prices which are substantially lower than what international customers pay. Only if there is no buyer in B.C. can a private forest landowner then sell logs outside of the country. this restriction by the feds only in B.C. and not to private forest owners in any other province.

Log exports keep people working. We receive a substatial price premium when we sell logs to Japan and the U.S. If we were not able to sell logs at that premium, we wouldn't be able to log many stands at all. That would put 2,000 loggers out of work, but would impact sawmill jobs as well since the majority of our logs go to BC mills. In an average coastal stand only 30% of the logs harvested are exported, the other 70% stay in B.C.

The U.S exports at least fout times as many logs to Canada as it imports to Canada. B.C. has been a net importer of logs in three of the past seven years. If we impose a tax on log exports, the U.S. may do the same to their log exports and many Canadian producers that rely on U.S. logs may be worse off.

Exporting some logs for a premium means we are able to get the highest return for our resource and put the logs to to their highest value use. Many logs that go to the U.S. are small second groeth logs that B.C. sawmills are not configured to process. If the logs stayed in B.B they would be chipped for pulp.

The bottom line on taxing logs is we lose jobs.

[Drea]

A log has the exact same stumpage fee whether it's sold to a Canadian manufacturing co. or a foreign manufacturing co.

When my father's company fells a tree, he doesn't necessarily know at that moment who is going to buy the log.

The United States as imposed a tariff on our manufactured wood because they say we are subsidising our forest companies with low stumpage fees.

If indeed this is the case, why does the US NOT impose a tariff on raw logs?

That was my question.

Your post didn't explain this.

First of all, we don't have "private forestland in BC". Sure there's the odd landowner that logs off the trees of this development property, but generally forest companies lease woodlots from the govt. (crown land).

We have restricted the supply of raw logs going to Japan. Canadian forest companies get around the restriction by selling them unfinished beams which they then manufacture into construction lumber.

Also in your post -- we buy logs from the states (when we could get them cheaper here, so says your post) then try to sell them the manufactured wood (on which they have imposed a tariff)? This doesn't make sense.

Regarding "small" second growth trees. Up north there are no huge trees. They just don't get that big around in cold climates. BC manufacturing companies in the north are configured for this wood or else they would be always importing logs from the coast. I'm sure CANFOR and Warehauser would locate their mills much closer to the logs (if indeed they could not process the skinny trees). Although I live here on the coast, I am originally from the northern interior. My father has been logging "toothpicks" for many years and I don't think they are ALL shipped to the states for processing. Usually they just get trucked to Westfraser sawmill in the town he lives.

Also, I find it hard to believe that we import 4x more than we export.

Also, WE don't impose a tax (tariff), the IMPORTING country does.

[Riverwind]

First of all, we don't have "private forestland in BC". Sure there's the odd landowner that logs off the trees of this development property, but generally forest companies lease woodlots from the govt. (crown land).

There are no export restrictions on logs cut from private land. More importantly: the US also prohibits export of logs cut from gov't land. so the US has no right to criticize Canada for restricting log exports.

[Leafless]

Drea

Concerning log exports:

http://www.timberwest.com/content/pdf/Log_..._Fact_Sheet.pdf

[RB]

Again... why is there no tariff on raw logs? Yet there is a tariff on the 2"x4" ?

No one has yet even attempted to answer this question. Why?

there can be different classifications of tariff for a product e.g. sometimes in the case of textiles in NAFTA the product must be transformed through several tariff classifications. If the product has transformed enough it causes it to move to another classficiation

There were several bilateral agreements, agriculture was one, cultural industry was another and auto but they were all stapled in one single document to enter Canada's wish inclusion for trilateral agreements.

[YankAbroad]

To be 100% frank, the thing that annoys me far more than the distortion of positions against the WTO which the softlumber advocates on the Canadian side are taking is this idea that Canada is just entitled to the entire American market without any blockades.

As someone who does business on both sides of the border, I see this attitude from the Liberal Party and its supporters all the time. American markets exist solely to fuel Canadian enterprises -- but whenever we Americans want to sell in Canadian markets, we're hit with taxes, fees, restrictions, regulations at the border, labour visa issues, etc. Whenever we complain, we're usually (quite haughtily told) that "Canada is a sovereign country and you're gonna have to do things OUR way, since the border is HERE."

Well why shouldn't that standard work both ways?

I'm all in favor of free trade, but if "free trade" in practice means handing over US markets and jobs to Canadian producers, with no benefits for American businesses (but plenty of barriers which, if they existed the other way, would get people in Canada screaming) what's in it for us?

[Drea]

What's in it for you?

Unrestricted access to our resources.

180 jobs were just created in Bellingham by Canfor opening up a remanufacturing plant there.

Utimately it's the American consumer who suffers. It costs a homebuilder an additonal $1000 for framing construction materials. Canada didn't impose this additional cost to American consumers -- America did.

We love to sell our wood to you and you need it. Why make it more diffictult for YOUR consumers?

[Drea]

Just got onto that link... from Private Forest Landowners.

If I have apples and you have apples, why not just keep our own apples instead of trading apples?

Obviously, if America is exporting her logs to us, she doesn't need ours. Obviously, we are exporting logs to the states, we don't need theirs. Why not just keep our own wood?

"Log exports are a small but important part of the BC forest industry".

Small?

"While some believe log exports threaten local mills, there is no shortage of logs in BC"

If there's no shortage, what in the heck are we doing importing logs?

Anyhoo, thanks for the link -- I'll be looking into this further.

[YankAbroad]

We love to sell our wood to you and you need it. Why make it more diffictult for YOUR consumers?

One could ask the same of the Canadian government.

Its policies towards American migrants, American investment, and American commerce in Canada have cost it considerable amounts of money.

For instance, since 1998, I have been stymied so many times by Canadian laws on sales, importing, labour, etc. that I've made investment decisions elsewhere. I estimate it has cost Canada seven full-time jobs averaging about $70,000 a year (which I created in the USA and the UK instead), over $6 million in direct economic activity (due to trade shows and consulting revenue which ended up happening in countries other than Canada), about $800,000 in taxes, and another $500,000 or so in capital investment (mostly office space).

And that's just lil' ol' me. I have several colleagues (not to mention competitors) whose numbers dwarf mine. We all comment on how truculent, arrogant, backwards and protectionist the Canadian government is, especially in dealing with American business, and how its sense of entitlement in full access to US markets but protection for Canadian enterprises undermines the Canadian economy.

There's a reason why the dominion's economic growth has been so stagnant compared to that of the States. . .

[Drea]

The sale of Terasen Gas.

to an American owned co.

The sale of Tim Hortons

to an American owned co.

The sale of MacMillan Blodel to Warehauser

an American co.

These are just three off the top of my head - I'd bet my next paycheque there's many more.

Give me a break already! Everything good that's Canadian gets bought up by an American company. Yet you call us protectionists for goodness sake! What the heck are we protecting? The US dollar? Geez.

How many Canadian companies are even allowed to purchase companies in the US?

Should we NOT protect ANY of our resources or should we just sell the whole damn country to Haliburton? Waddya think?

[YankAbroad]

How many Canadian companies are even allowed to purchase companies in the US?

Canadian companies have purchased many major American companies -- Banknorth and Waterhouse securities both come to mind immediately.

Of course, big corporate transactions by multinationals which have no real nationality don't address the idiotic trade barriers erected against everyday people.

Should we NOT protect ANY of our resources

You cannot have it both ways -- on one hand, dumping lumber below cost in the USA and declaring it's your right to have unfettered access to our markets, and then on the other hand, closing Canada off to American services and labour.

Choose one or the other.

[Drea]

You cannot have it both ways -- on one hand, dumping lumber below cost in the USA and declaring it's your right to have unfettered access to our markets, and then on the other hand, closing Canada off to American services and labour.

Choose one or the other.

NAFTA ruled that Canada is NOT dumping lumber below cost.

WHEN is the USA going to comply with the rules? Oh riiiiight -- they only follow the rules when it suits them.

We DON'T have "unfettered" access to your markets. When was the last time you bought Canadian Cheddar in the US at the same price as US cheese?

When I go to buy an apple, the BC apple is more expensive than the American apple -- dumping cheap friggin' apples into our market! Grown by Mexican labourers below minimum wage with no benefits just so you can sell cheap apples.

Damn them apples. LOL

And WINE! Friggin California wine! Tastes like crap, but it's CHEAP, eh.

Americans are busily buying up Canadian oil sands (as we speak/type)... not too long ago China wanted to buy California Oil but were told there are a "security risk" Pfft.

America isn't concerned about a "security risk" they simply want to hog all the world's oil (including ours).

[YankAbroad]

NAFTA ruled that Canada is NOT dumping lumber below cost

And the UN said Saddam Hussein had stocks of WMDs.

My point is, Canada's got to stop being schizophrenic.

Either it wants free trade with the USA -- which goes both ways and has no restrictions on what can be imported or exported, or it wants to "protect its markets and resources," in which case it cannot get into a big tizzy when the Americans do the same thing.

It's simple, really.

not too long ago China wanted to buy California Oil but were told there are a "security risk" Pfft.

America isn't concerned about a "security risk" they simply want to hog all the world's oil (including ours).

I'm happy to let Canada sell oil to the Chinese without US opposition once Canada makes sufficient investment in continental defence. As long as it's not going to have sufficient armed forces to guarantee its own territory and instead lean on the Americans, I don't think it's in a place to determine what does or doesn't risk continental security -- since it won't be in a position to fix continental security if it miscalculates.

Again, Canada loves double standards.

We invest in Canadian companies and provide the capital needed to get at the oil in them thar sands, we're "taking things over." But if we put Canadian-style taxes or tariffs on markets we want to protect, we're being "unfair free traders." Such schizophrenia can not persist forever -- eventually the Canadian polity will have to decide whether it wants free trade and prosperity, or protectionism and poverty for the sake of misguided and silly nationalist pride.

[Drea]

And the UN said Saddam Hussein had stocks of WMDs.

My point is, Canada's got to stop being schizophrenic.

Either it wants free trade with the USA -- which goes both ways and has no restrictions on what can be imported or exported, or it wants to "protect its markets and resources," in which case it cannot get into a big tizzy when the Americans do the same thing.

We didn't impose the tariff on the wood -- your country did. Who's protecting what? Looks like American forest companies are being coddled by your govt -- a govt who, by the way, is NOT following the rules of NAFTA. Canada IS following the rules.

It's simple, really.

I'm happy to let Canada sell oil to the Chinese without US opposition once Canada makes sufficient investment in continental defence. As long as it's not going to have sufficient armed forces to guarantee its own territory and instead lean on the Americans, I don't think it's in a place to determine what does or doesn't risk continental security -- since it won't be in a position to fix continental security if it miscalculates.

Again, Canada loves double standards.

Why is there such a fear of the burgeoning middle class in China?

You say you are not "taking things over" when your companies come up here an buy up a successful company -- yet your afraid of the Chinese buying up your oil when a Chinese investor tries putting his money in California. Hmmmm?

While we don't "fear" America the same way America "fears" China, you get the idea.

America loves it's double standards.

Before you start looking north to complain about foreign and trade policies, take a look at your own govt and their dismal record in this regard.

We invest in Canadian companies and provide the capital needed to get at the oil in them thar sands, we're "taking things over." But if we put Canadian-style taxes or tariffs on markets we want to protect, we're being "unfair free traders." Such schizophrenia can not persist forever -- eventually the Canadian polity will have to decide whether it wants free trade and prosperity, or protectionism and poverty for the sake of misguided and silly nationalist pride.

"... we invest in Canadian companies and provide the capital..."

Poor Canadians, no investors, everybody living on welfare in igloos, Poor Canadians, let's go save them. Pfft.

Every time I buy a cup of coffee at Tim Hortons I'm lining the pockets of some foreigner. Timmy's didn't need the capital. An American saw something good, came up here and bought it. There was no "improvement" required, so it's not like Tim Hortons was saved from bankruptcy.

The oil in our tar sands does not belong to America -- very briefly the other night on the tube -- GW saying something to the effect of "We are going to protect our North American resources". Well, they are not his for the protecting. If Iran or China or Russia want to invest, who are we to say "no thanks, we only take money from America". We aren't afraid of a takeover from anyone except America.

Imagine the day when America can no longer purchase oil from the middle east... Canada will still have lots of oil. Will we have imaginary WMD too? Will GW come and save us, give us democracy. Or will you say "you owe us for protecting you" from the invisible, unknowable, unstoppable terrorist.

The only country on this planet that garners any fear whatsoever from Canadians is yours with it's rogue administration.

Oh yes, OUR national pride is "misguided" and "silly", but your national pride is patriotic, riiiiight.

[YankAbroad]

You're not listening to me, Drea.

I KNOW the tariffs were imposed on soft lumber by the USA.

Canada imposes tariffs on Americans and American businesses as well.

My point is -- either you support the "right" of the two countries to put tariffs on to "protect" industries, or you don't.

I don't support tariffs on soft lumber (USA) OR professional services (Canada). I think both are stupid. However, Canada cannot cry foul on the abrogation of free trade principles for soft lumber, but then exercise lots of tariffs and also non-tariff barriers to protect Canada's domestic professional services market from American competition. Free trade is free trade.

Why is there such a fear of the burgeoning middle class in China?

Ever lived or done business in China?

I have.

The "burgeoning middle class" is about 100 million urbanites in the east of the country, most of whom are members of the Communist Party and support the leadership. There's no democracy there, and the vast majority of the country is poor AND getting poorer. That's one reason why, if China's growth drops below 7%, Beijing's a cooked goose.

Selling China lots of oil is fine. . . but the Red Army (not democratically controlled) is diverting many of those profitable dollars from industry (and oil) into their armed forces. I know it's fashionable to point out that the US has a large armed force as well, but the US isn't exactly planning to annex its neighbours, nor is it a dictatorship which requires lots of military muscle to maintain control. If you want to support that sort of thing, more power to you, but don't complain when Washington says it doesn't like it.

You say you are not "taking things over" when your companies come up here an buy up a successful company -- yet your afraid of the Chinese buying up your oil when a Chinese investor tries putting his money in California

I'm not "afraid" of Chinese enterprises investing in the USA -- as long as it's private money.

However, China's "investments" overseas are typically government enterprises which use public funds to make their investments -- not very competitively sound.

Would you allow the American government to buy TD, Air Canada, CN, or Bombardier? Probably not, and the USA is an erstwhile ally who never talks about attacking Canada.

Why should the USA allow the Chinese government to buy large and strategically important companies, especially when the Chinese have expressed a desire to go up against the USA and has talked, publicly, about nuking our west coast?

Imagine the day when America can no longer purchase oil from the middle east

The USA will be on an alternative energy source long before that day comes. The investments in alternative energy being made right now in Silicon Valley and other technology corridors are orders of magnitude larger than the equivalent investments in computer technology which created the e-business economy we presently live in.

Within 20 to 30 years, hydrogen will be a mainstay fuel alongside petroleum, and the relevance of oil will be significantly lower than it is today.

Of course, it would be in Canada's best interest to ensure the people who protect it from foreign enemies, provide it with over 40% of its economic activity, and buy lots of its stuff have regular access to energy supplies as well.

The only country on this planet that garners any fear whatsoever from Canadians is yours with it's rogue administration

Which is, sadly, why Canada is destined to middling status in the G7 for eternity. As long as it wastes all of its energy on fake English-Canadian nationalism preaching about how much it hates those damn Yanks who keep them all employed, and pretends that major geopolitical conflicts aren't happening, or that its eggs aren't mostly in the North American basket (as opposed to the Chinese or European one), it will continue to see its influence diminish.

Oh sure, people will pat Ottawa's diplomats on the head in Brussels and Beijing when they say "the right things about the Americans," but that's not going to make Canadians any money (as is evidenced by Canada's stagnant wage growth over the past ten years).

As an American citizen, I have little time for tiresome geopolitical nationalism, especially of the "we fear you and your leader sucks" variety. I cannot think of a G7 leader who isn't an odious twat -- Canada's PM included -- nor can I think of a G7 country which hasn't practised the hypocrisy in foreign, domestic and trade policy which everyone insists is America's exclusive purview.

I cannot say I get too excited these days by it. I've come to expect it, and if Canada doesn't want my money, talent, investment or jobs, I'll go where they are wanted. So far, I've not had any trouble, and it gives me the ability to not have to listen to people screaming about the wicked horrible Yank all the time, who is personally responsible for George W. Bush's decision-making.

[tml12]

Drea,

"NAFTA ruled that Canada is NOT dumping lumber below cost.

WHEN is the USA going to comply with the rules? Oh riiiiight -- they only follow the rules when it suits them."

I admit the Americans have been quite arrogant and stubborn in regards to the Byrd Amendment but you must admit our government here has not been so sweet and kind on other issues either. As Harper put it, the Liberals allowed relations to get so bad, Bush just doesn't seem to care about Canada's interests. Also, in Martin's never-ending dithering on missile defence, etc. I am not surprised the U.S. was in no rush to take action. Hopefully now, things will be different.

"We DON'T have "unfettered" access to your markets. When was the last time you bought Canadian Cheddar in the US at the same price as US cheese?"

I don't often go shopping in the U.S. and when I do I buy Vermont cheddar.

"When I go to buy an apple, the BC apple is more expensive than the American apple -- dumping cheap friggin' apples into our market! Grown by Mexican labourers below minimum wage with no benefits just so you can sell cheap apples.

Damn them apples. LOL

And WINE! Friggin California wine! Tastes like crap, but it's CHEAP, eh."

I am a HUGE fan of White Zinfandel...better than any wine you buy in the food store here (although I love our Quebec apple cider).

"Americans are busily buying up Canadian oil sands (as we speak/type)... not too long ago China wanted to buy California Oil but were told there are a "security risk" Pfft.

America isn't concerned about a "security risk" they simply want to hog all the world's oil (including ours)."

If I were the U.S. government, I would sure as heck be more concerned about China investing oil in the States than the Canadian government investing in oil here...that is a no-brainer...

And you don't think Canada wants in on world oil? Why do you think the Liberals (Chretien and Martin) sucked up to Bush after refusing the initial invasion of Iraq. The Liberals are looking to have it both ways...

[YankAbroad]

As Harper put it, the Liberals allowed relations to get so bad, Bush just doesn't seem to care about Canada's interests.

That's true, too.

I tried explaining this to people outside the USA who don't like Bush.

I don't like Bush either.

But all the screaming and hatred towards Americans who vote for him doesn't do them a whit of good.

Why?

If the prevailing assumption is that Canada or the EU is going to criticise the USA and slam its citizens and leadership no matter what the USA does, then why shouldn't the USA just do what it wants to do and ignore the EU and Canada alike? There's been no detriment to it so far.

What's Canada going to do to the Americans anyway? Sell its oil to China instead? Does Canada really think it's in a position to threaten the United States?

Good Lord, I wish people would grow brains on these issues. If you want to influence American policy and American voters, do it by making the success of Canada important, personally and economically, to Americans -- with things like a real free trade zone, removing restrictions on professional services, eliminating restrictions on work and residency, etc., etc., etc. Otherwise, all you're doing is chopping off your nose to spite your face.