November 08, 2010

Defending Idaho Jobs

Guest column submitted by U.S. Senator Mike Crapo

To find a model of ingenuity and resilience, visit an Idaho sawmill. Idaho's forest products industry, interwoven into the region's history and central to the development of the area, has experienced significant challenges in recent years with the downturn in the housing market and economy, increased transportation and energy costs, raw material availability and unfair trade practices. Facing these tests, Idaho sawmills and forest products workers have increased efficiency and innovation. Advanced technology and process control have enabled lumber producers to remain competitive, increase the value extracted from each log and target products to best meet customer needs. As lumber producers and workers continue to advance, every effort must be made to ensure a just market, and ensuring our nation's trade partners honor their commitments is critical to this effort.

Recently, United States Trade Representative Ronald Kirk initiated consultations with Canada under the 2006 Softwood Lumber Agreement (SLA) regarding the unfair under-pricing of timber harvested from public lands in British Columbia (BC). The U.S. entered into the SLA with Canada to settle disputes regarding Canada's subsidization of the price of timber sold to softwood lumber producers that was negatively impacting U.S. lumber producers and workers. After years of negotiations, achieving the SLA was an important step toward ensuring a fair and open softwood lumber market. However, the effectiveness of any trade agreement depends on trade partners respecting the terms of the agreement and timely resolution of violations.

Unfortunately, Canada has been found to have violated the terms of the agreement, and the Bush and Obama Administrations have taken necessary steps to ensure that the agreement is upheld. The concern in this case is with the substantial increase of the proportion of timber harvested from public lands in BC being designated as low-grade timber and sold to sawmills for the low price of 25 cents per cubic meter, saturating U.S. lumber markets with subsidized, underpriced timber. Consultations are an initial step in trying to resolve the issue and reach a mutually-favorable resolution through an exchange of views between the U.S. and Canada. If unresolved within 40 days, formal adjudication may commence to settle the issue. As a member of the Senate Finance Committee, with jurisdiction over trade agreements, I have actively pressed for the timely resolution of this dispute to protect Idaho jobs. I welcome the consultations and commend the Administration for taking this important first step.

Even with the challenges, Idaho's forest products industry remains an essential part of the local and national economy. Between 2007 and 2008, the Inland Northwest Forest Products Research Consortium found that the majority of Idaho's wood and paper product manufacturers experienced decreased profits, curtailed production and reduced employment. Despite significant hits, for 2008, Idaho's primary wood and paper products' sales were valued at nearly $1.7 billion, and forest industry employment was estimated at 13,500.

Non-compliance with the SLA must be curbed to ensure a just market for the lumber industry in Idaho and across the nation. In a fair market, American producers can compete with the best in the world, but we must not allow foreign governments to tip the scales in their own favor. The United States must continue to use every possible tool to ensure the enforcement of the SLA and defend Idaho jobs and the livelihoods of American families. Trade agreements and rules must be upheld to better ensure Idaho and American softwood lumber companies and workers can compete successfully.

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