The American forestry industry is a critical element of U.S. manufacturing

The American forestry industry is a critical element of U.S. manufacturing and economies of communities nationwide. 650 facilities operate in the sawmill, millwork, and treating sectors.

11 million U.S. landowners managing 640 million acres depend on a strong domestic lumber industry.

The U.S. softwood lumber industry is under severe strain from unfairly traded imports of lumber from Canada. Canadian lumber producers claim that any disadvantage for U.S. producers is due to inefficiency in the U.S. industry.

But, the U.S. lumber industry is highly competitive and is rated among the most efficient lumber industries in the world. Independent studies, including Canadian studies, show that the cost of manufacturing lumber in the United States is comparable to or lower than the cost in Canada.

The Canadian industry's only real advantage over the U.S. industry is access to taxpayer-subsidized Canadian timber, which dramatically -- but artificially and unfairly -- lowers Canadian production costs.

The U.S. competitive market naturally discourages inefficiency. Operating in a market, U.S. mills that cannot compete effectively will not survive. In a competitive market, the cost of timber accounts for 60-70% of variable manufacturing costs and will rise as lumber prices rise.

In stark contrast, the Canadian government -- which owns virtually all timberland in Canada -- shields Canadian lumber companies from market forces by artificially lowering those companies' wood costs by charging noncompetitive, below market prices for government timber and by distorting private log markets.

Thus, the alleged efficiency advantage of Canadian lumber is based solely on the massive subsidies enjoyed by Canadian lumber manufacturers.

The Canadian regulatory system provides special breaks for failing mills and discourages competition through limits on tenure transferability.

This regulatory system, along with other systemic economic distortions, helps keep Canadian mills with high cost structures in business, facilitating uneconomic production and unfair competition.

In addition to providing unfair subsidies, Canadian provinces have instituted other policies designed to maximize jobs and production in the Canadian industry -- including minimum harvest requirements, domestic processing mandates, and log export restrictions -- resulting in artificially high levels of timber harvests and lumber production even when the market is oversupplied.

The end-result is that Canadian companies unload excess production into the U.S. market at a cost of thousands of good-paying American jobs.

Source: The US Lumber Coalition

Post a Comment

Popular Posts

The Arctic Circle Design Forum

Digital Storytelling

Mexico open for business

Continued Stable Profit Development for Raute