If this keeps up they should call it the North American Free Trade Disagreement. In spite of a recent NAFTA ruling in favour of the Canadian position in the softwood lumber dispute, settlement is nowhere in sight. Canadian companies still have to pay for every load shipped over the border.
An extraordinary challenge committee rejected a U.S. appeal of an earlier NAFTA decision that ruled that Canadian lumber imports into the U.S. do not threaten injury to the U.S. Industry. Given that ruling, the U.S. government should repeal the duties. But it hasn’t.
Locally, that means Vanderwell Contractors is still paying more than it should be to sell its lumber in the U.S.
“It’s business as usual,” says Vanderwell’s General Manager Ken Vanderwell. “We’re still being charged duties.”
Since May of 2002 Vanderwell Contractors of Slave Lake has been paying a penalty for shipping its lumber to market in the U.S., amounting to something in the area of 25 per cent. So have lots of other Canadian lumber exporters, to the tune of about $5 billion so far.
The money goes into a trust account, pending final resolution of the trade dispute. The aggrieved U.S. lumber industry wants that money to help make itself more competitive with Canadian mills. The Canadian industry, needless to say, wants it back.
Under NAFTA rules, without threat of injury, there’s no legal grounds for countervailing duties or anti-dumping duties – the two types that many Canadian companies have to pay for the privilege of selling their product south of the border. But the day after the recent NAFTA ruling, a U.S. government spokesperson was quoted as saying that the U.S. would not abide by the ruling.
“They’re going to mount a constitutional challenge to NAFTA,” says Vanderwell. “It’ll be interesting to see what happens.”
The protectionist lobby seems pretty strong, but free trade has its proponents too.
“(Keep) in mind,” says Vanderwell. “The Americans need this lumber.”
Canadian exports make up about 33 per cent of the total demand for lumber in the U.S., says Alberta Forest Products Association Director of Public Affairs Parker Hogan. Organizations such as the National Association of Homebuilders and American Consumers of Affordable Housing are vocal opponents of the U.S. government’s action on Canadian softwood lumber.
Things might get worse before they get better. Due to the huge pine beetle kill-off of forests in central B.C., there’s a ‘wall of wood’ on its way into the U.S. market, pushing prices down. Low-priced Canadian lumber is what drives the Americans into protectionist mode in the first place. Vanderwell says the glut of lumber, “puts pressure on the rest of the industry.”
For the time being, Vanderwell’s is selling all the lumber it produces, the majority of it in the Canadian market.

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