The Associated Press
LEWISTON, Idaho (AP) — Canadian softwood lumber imports have surged since a trade agreement between Canada and the United States expired at the end of March, according to figures from the U.S. Commerce Department.
Since the agreement expired, preliminary figures show Canadian imports increased 26 percent from March through May.
The Canadians continuing to dump their subsidized products down here (and it) is driving the lumber market down, said Greg Konkol, vice president of the Konkolville Lumber Co. in Orofino, Idaho. Most of the operations in the area are pretty beat up and tattered coming off this horrible 18 month lumber market.
The 1996 softwood-lumber pact between the two countries controlled the amount of Canadian lumber that could enter the U.S. market duty-free. Now, there are no strictures.
So, a lawsuit was filed by more than 250 domestic timber companies charging the Canadian government with unfairly subsidizing the price timber companies pay per tree, as well as dumping Canadian lumber on the U.S. market below the cost of production.
After the pact expired, there was a brief period when dimensional lumber prices rebounded on speculation Canadian companies would limit exports to improve their chances in the lawsuit.
The Guy Bennett mill in Clarkston, Wash., started turning a little profit and it looked like spring would be good, said Gary Tragesser, vice president for Bennett Lumber Products.
But then about three weeks ago, around the middle of May, the lumber market started to fall, Tragesser said. And I had never seen it fall as quickly as it had — back down to a level where the mill is no longer making money.
Konkol and Tragesser blame the flood of imports.
Doug Smyth with IWA of Canada, a Canadian woodworkers union, said it was the threat of retroactive fines being assessed against Canadian lumber as a result of the lawsuit that caused the April surge.
If the U.S. timber industrys lawsuit can prove its case, then a retroactive duty could be leveled against Canadian companies. But that duty would only go back as far as April 30, Smyth said.
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