moved:
That this Committee take note of the softwood lumber industry.
Mr. Chairman, does the minister not speak ahead of me? I ask because we have had three days of meetings in Washington this week and I understand there may be late breaking developments. I do not want to find that whatever I might say is pre-empted by more recent events. That is the only reason I ask if the minister would like to precede me. I am pleased that the minister and others in the House are interested in hearing what I have to say.
We have had two other debates in the House since we came back on September 17. One was about the airline situation, an obvious area of priority. The other was about the situation on the prairies, another obvious area of concern.
Anyone who suggests softwood lumber is not a major concern in Canada would be incorrect. As of today in British Columbia alone somewhere in the order of 15,000 workers have been laid off. Estimates are that 30,000 may be laid off by the end of the year. On a national basis 40,000 to 50,000 people could be laid off at either end. Obviously this is an unhealthy situation for workers, their families, their communities and their employers.
If free trade in lumber between Canada and the U.S. cannot triumph over protectionist U.S. legislation, Canada and the U.S. will both be losers. The Government of Canada must take this situation with the utmost seriousness. So far its track record is not good.
I will offer some solutions, but a bit of background is in order first. Until March of this year, the same month the quota driven and detrimental five year softwood arrangement expired, the government had no publicly enunciated direction on softwood. When it finally adopted the free trade position the Canadian Alliance had been promoting for months, we were encouraged by its action.
At a time when there is every reason for optimism about achieving free trade in lumber there needs to be strong representation from the Prime Minister. There is no sign that this is happening in a real sense.
We have had several optimistic signs from the U.S. administration. On September 20, U.S. trade representative Robert Zoellick wrote an important piece in the Washington Post called “Countering Terror with Trade”. I will quote a couple of statements from the article:
Our nation has drawn together in shock, mourning and defiance. Now we must thrust forward the values that define us against our adversary: openness, peaceful exchange, democracy, the rule of law, compassion and tolerance. Economic strength--at home and abroad--is the foundation of America's hard and soft power...To that end, U.S. leadership in promoting the international economic and trading system is vital. Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle.
Zoellick went on to say:
Congress, working with the Bush administration, has an opportunity to shape history by raising the flag of American economic leadership.
With the stroke of a pen the Bush administration removed tariffs on some of the products of its trading partners to solidify the coalition against terrorism. Indonesia had duties removed from plywood exports to the tune of about $200 million per year. This demonstrates what is possible.
On Monday of this week the American Consumers For Affordable Homes, who represent 95% of lumber consumption in the United States, wrote to President Bush and asked him to reverse the commerce department's preliminary countervail duty of 19.3%.
The American Consumers For Affordable Homes organization has consistently promoted free trade in lumber. It represents many more jobs in the U.S. and represents the consumer interests as opposed to the U.S. lumber lobby.
With these series of events and with senior Bush administration officials and U.S. federal reserve chairman Alan Greenspan all promoting free trade and suggesting that U.S. protectionist legislation is counterproductive, the stage is set for a push by the Prime Minister to break through and appeal directly to President Bush to set aside the CVD determination imposing a 19.3% duty on Canadian lumber.
The American consumer group pointed out to the president this week the importance of a strong housing sector in a fragile economy and that U.S. gross domestic product growth could be reduced by 15% to 30% because of the 19.3% tariff.
What is concerning me today is that we are hearing, as a consequence of talks going on in Washington, that there may be an arrangement whereby these talks have actually turned into negotiations which have strayed from the free trade path and have now taken us into an area where we may have direct negotiation between the U.S. trade representative and our provincial jurisdictions. If this is the case, and I am waiting to hear from the minister on whether it is, then I want to put a warning shot out there that this is betraying free trade and the strong coalition that has been built up over the last two years on both sides of the border to pursue free trade in lumber. If that is the case then I can only say that I am disappointed that this government can lose its vision and its principles.
We entered into a very bad deal in 1996 when we got into the five year softwood lumber agreement. If we agree today to these kinds of balkanized negotiations I can only say that would be a total abandonment of the consumer interest, local governments and the greater Canadian interest.
This will only lead to a situation where the U.S. lumber lobby will have divided and conquered. It will only lead to a lack of accountability where the federal government can say that it has washed its hands of responsibility for these bilateral trade negotiations. This is a federal area of jurisdiction and it will place us further from free trade in lumber than we have been in a long time and I do not know how we would ever get back there.
What is clear is that if we appeal at the highest levels, as other countries have done, if this is the number one priority of the Prime Minister and he talks directly to President Bush, the Bush administration is sympathetic if we can get the right priority placed on this file.
The government and almost everyone else who is involved in this circumstance agrees that if we stay the course, go to the World Trade Organization and to NAFTA panels, we will win.
I just want to make it clear that any deal with the U.S. beyond free trade will cause us permanent long term damage. It is already clear from the likes of Senator Baucus from Montana and others in government who are part of the U.S. lumber lobby coalition that any negotiated deal would have to include restrictions on Canadian lumber.
