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Resolute president calls for free trade for lumber


April 13, 2016
By Cindy Macdonald

We need to be able to freely sell lumber to the U.S., Richard Garneau the Canadian Parliament’s Standing Committee on International Trade. The president and CEO of Resolute Forest Products appeared before the committee in Ottawa on April 12.

Testifying in support of free, unencumbered access for softwood lumber exports from Central Canada (Quebec and Ontario) to the U.S. market, Garneau formally presented his perspective, drawing on over 40 years of experience and leadership in the forest products industry across Canada.

Resolute is Canada’s largest forest products company and the largest producer of softwood lumber east of the Rockies. Garneau challenged the claims by some that the previous 2006 Softwood Lumber Agreement between the United States and Canada produced predictability and stability. In his formal comments, and in the question and answer period that followed, Garneau made the case that managed trade increased volatility, creating an unpredictable and unstable trade environment between the two large trading partners.

“Canadian demand is simply not enough to absorb all the production of Central Canadian sawmills,” stated Garneau. “We need to be able to sell freely to the U.S. Indeed, that was the whole point of the Canada – U.S. Free Trade Agreement and NAFTA. Just about every industry enjoys free trade, except for softwood lumber,” he added.

In his formal remarks, Garneau emphasized the destructive nature, particularly for Central Canada, of the last managed trade arrangement between the United States and Canada, which expired in 2015. “The purpose of a deal must not be simply an alternative to litigation. It must be to assure fair and equitable trade,” he stated.

“If there is to be a deal, it must recall a principled purpose: that the Canadian softwood lumber industry does compete fairly in North America and pays a fair market price for timber, and that our forestry regimes are market-based. The Government of Canada must not negotiate a deal that does not fully recognize Central Canada’s right to free trade,” summarized Garneau.

While Western Canadian softwood lumber producers benefited from China’s extraordinary economic development, logistical limitations mean that Asian markets remain out of reach for Central Canadian producers. Additionally, Western softwood lumber producers’ purchase of some 40 sawmills in the U.S., with a production capacity of some five billion board feet, afford them an important measure of insulation from future restrictive measures. “To put this capacity into context, it is over 150 per cent of the total existing capacity of Ontario’s sawmills,” said Garneau.

In a press statement, Resolute notes that Canadians have won every legal fight with the United States over softwood lumber. The company also states that Canada has proven according to the law that its industry is not subsidized, and does not cause injury to any U.S. industry.

Resolute Forest Products produces a diverse range of forest products, including market pulp, wood products, tissue, newsprint and specialty papers. The company owns or operates over 40 pulp, paper, tissue and wood products facilities in the United States, Canada and South Korea, as well as power generation assets in Canada.