When the 5-year-old Softwood Lumber Agreement between the United States and Canada expired March 31, industry analysts predicted cheap, tariff-free Canadian lumber would saturate the U.S. market.
Nearly one month later, that still hasn't happened.
Canada is limiting its government-subsidized lumber exports to the United States in part because of two lawsuits filed by a Georgia lumberman on behalf of the U.S. Coalition for Fair Lumber Imports and Tolleson Lumber Co.
Other petitioners include the United Brotherhood of Carpenters and Joiners and the Paper, Allied-Industrial, Chemical and Energy Workers International Union.
The lawsuits want tariffs up to 40 percent levied on Canadian softwood. The U.S. Department of Commerce announced Monday it will investigate both lawsuits and issue a ruling within three to five months.
Rusty Wood, president of Tolleson Lumber in Perry, Ga., is chairman of the coalition, which alleges the Canadian government-subsidized lumber industry makes it impossible for domestic loggers to compete.
The coalition's suit claims Canada is "dumping" its lumber - selling it below production costs - so the government can create jobs for its citizens. About 95 percent of Canadian forest land is government owned.
"We don't harvest national forests in the U.S. - what do you think they're harvesting up there?" Mr. Wood said. "A lot of that is the same old-growth forest that we protect down here."
If it decides to support tariffs, the Bush administration will have an unlikely ally in the environmental movement, which generally doesn't support the overharvesting of timber.
Industry watchers believe Canada is being careful not to boost its exports to the United States in light of the controversy.
"A surge in imports would hurt the Canadian claim that they're not dumping," said Marshall Thomas, president of F&W Forestry Services, a forest management company based in Albany, Ga.
The Department of Commerce said it will conduct a thorough investigation of five to 10 Canadian lumber companies to determine their cost of producing lumber and what they sold it for.
The agency will then either rule in favor of the lawsuits, reject them or settle on a lower tariff.
"Now we just have to hope they see the same numbers as we do," Mr. Wood said.
The average softwood price for lumber from Ontario and Quebec is about $50 per 1,000 board-feet. The same amount of U.S. lumber costs more than $300.
About 70 percent of the softwood used in Florida, for example, comes from Canada, Mr. Thomas said. Companies can have lumber milled in Canada and shipped to Florida for less than purchasing it from the Augusta area.
"Our message to the Canadians is, `If you ever actually sell your timber, we will fold up our tent and go home,"' Mr. Wood said. "We're positive we can compete with them if they would sell their timber to the highest bidder."
Reach John Bankston at (706) 823-3352 or email@example.com.
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