U.S. Lumber Coalition Seriously Concerned by British Columbia Log Export Policy Changes

Tue Feb 26, 2013 10:36am EST

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WASHINGTON,  Feb. 26, 2013  /PRNewswire-USNewswire/ -- The U.S. Lumber Coalition
is seriously concerned by the recent announcement of log export policy changes
in  British Columbia  (BC), particularly an increase in the "fee in lieu of
domestic manufacturing" applied to many log exports that will take effect on 
March 1.  

Log export restrictions have the effect of insulating BC lumber mills from world
market prices for logs, which have increased significantly in recent years as 
China  and other countries have increased their demand for North American logs. 
The recent announcement of measures to tighten log export restrictions on the BC
Coast will allow BC lumber producers to pay even further below-market prices for
their log inputs.

"In effect, BC has increased the implicit subsidy from log export restrictions
for BC Coast lumber mills," said  Luke Brochu, Chairman of the Coalition and
President of the family-run Pleasant River Lumber Company in Maine.  "This gives
BC Coast lumber mills a greater advantage in the U.S. market, at the expense of
U.S. mills that pay full market price for their inputs," he explained.

Logs harvested from public or private lands in BC must be advertised to local
mills before they can be exported.  If a local mill offers to pay the prevailing
domestic log price - which can be much lower than the export price - for a
particular log sort, export of that sort is prohibited.  Further, even when
permission to export is granted, a "fee in lieu of domestic manufacture" is
assessed on logs harvested from public and some private land.  This fee is often
much greater than the price that BC charges to harvest standing timber on public
land.  Effective  March 1, the "fee in lieu" on the BC Coast will be increased
by 20 percent.

The 2006 U.S.-Canada Softwood Lumber Agreement (SLA) is a trade agreement under
which the U.S. industry gives up its rights to invoke U.S. unfair trade laws on
softwood lumber from  Canada, in return for  Canada's agreement to impose export
taxes and quotas on Canadian lumber when lumber prices fall below certain
levels.  A key provision of the agreement is that Canadian provinces may not
modify their timber pricing systems in ways that move them further away from
market conditions.  The increase in the "fee in lieu" would appear to be
inconsistent with this requirement of the trade agreement.

"The Coalition has brought this matter to the attention of  the United States 
government," Mr. Brochu stated.  "We have asked them to raise this issue
urgently with their Canadian counterparts, and we urge our government not to
hesitate to defend U.S. rights under our trade agreement with  Canada."

About the U.S. Lumber Coalition

The U.S. Lumber Coalition is an alliance of large and small lumber producers
from around the country, joined by hundreds of thousands of their employees, and
tens of thousands of woodland owners. The Coalition is united in opposition to 
Canada's unfair lumber-trade practices, including the gross under-pricing of
timber on government-owned lands. For more information, please visit the
Coalition's website at  www.uslumbercoalition.org.

SOURCE  U.S. Lumber Coalition

Zoltan van Heyningen, zoltan@uslumbercoalition.org, +1-202-582-0021

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