Canada’s forest products industry is launching a $17-million advertising and communications blitz in the U.S. this summer aimed at building support for Canadian lumber producers among American home builders, politicians and consumers.
With money obtained from Minister of International Trade Pierre Pettigrew, the Ottawa-based Forest Products Association of Canada is looking to partner with some American allies to exert pressure on the Bush administration to return to the free trade in lumber that existed between the two countries before last year’s expiration of the softwood lumber agreement.
“There is a desire to express to Americans the damage that the softwood lumber duties are doing,” says Ruth Thorkelson, vice-president of government relations with the Forest Products Association of Canada, in an attempt to persuade the Americans to return to the negotiating table.
The tone of the campaign, the audience, the industry markets and form of media has yet to be determined, she says, but her association’s consensus is that the message should be a “relatively aggressive” one.
“The industry is thinking about focusing on American interests that have been hurt by the softwood lumber duties...which means consumer advocates and proponents of affordable housing, home builders and construction industries.”
Canadian wood product occupies 35 per cent of the total lumber used in the U.S. construction and homebuilding market.
They are now paying 27.2 per cent duties on about $10 billion a year worth of American-bound shipments after the U.S. International Trade Commission ruled in early May that imports from Canada pose a threat to the U.S. lumber industry.
Rather than directing their campaign at the White House, Thorkelson says the intent is to deliver the message through “intermediaries,” namely U.S. elected officials in constituencies hurt by softwood lumber duties, and have them carry their complaints upwards to Washington.
“We have one objective and that is to be effective. If there is some desire for some name-calling and mud-slinging that’s probably better suited for therapy than effectiveness,” she says. “ But a more hard-nosed approach has not been ruled out, depending on the wishes of the forest products coalition.
“We hope to test something in the field this summer.”
Among those U.S. supporters of the Canadian industry is American Consumers for Affordable Homes.
“Home building has driven our economy for the last few years and anytime you invest a negative into that industry, there’s consequence of someone not buying a home,” says spokesperson Susan Petniunas.
“It creates a shadow on the marketplace that could be problematic.”
Her Alexandria, Va. lobby group contends the duties will add nearly $1,500 (US) to the cost of a new home and squeeze close to 450,000 families out of the housing market.
Though closely monitoring the housing market with duties in place, Petniunas says it is still too early to assess the full brunt of the duties on American consumers and the home building industry as a whole, but the ramifications are not good.
“I can’t speak on a case-by-case basis, but there is an economic consequence in our country,” says Petniunas, whose pro-free trade group represents an alliance of 18 American organizations and businesses, including retailing giant Home Depot.
Home Depot testified before the International Trade Commission in March along with a panel of other home builders, lumber dealers and manufactured-housing firms, in pointing out that Canadian softwood lumber does not compete with southern yellow pine and that charges by protectionist coalitions are false.
The panel was unsuccessful in appealing to the commissioners to reject the commerce department’s plan to impose the duties.
There is now concern that U.S. retailers and home builders might source lumber from other countries, or consider product substitution such as light weight steel studs.
“It’s too early to tell, but it might be an option,” she says.
Petniunas says her organization will continue to remain politically active through ongoing talks with Bush administration officials about the adverse effects of the punitive duty.
“Hopefully the Canadian legal cases (before the World Trade Organization) will be allowed to take their natural evolution because we think Canada will ultimately prevail.”Petniunas says Canada does have support on Capitol Hill.
Both the U.S. House of Representatives and the Senate tabled two resolutions in March in favour of freer and fairer bilateral trade on softwood lumber. It was supported by over 100 members of Congress and 13 U.S. senators including Don Nickols, the second-ranked Republican in the Senate and former vice-presidential hopeful Joe Lieberman.
Though the softwood fight dominates headlines in the Canadian business pages, very few Americans are aware of the dispute, says Petniunas.
“It’s very much an inside-the-Beltway issue, given the size of the forestry industry in relation to the country.”
But she expressed satisfaction over her group’s efforts the past two years playing a role in keeping the levy on Canadian softwood exports under 30 per cent and not broadening the levy to include value-added products.
“There are some very key editorials in the Washington Post and Wall Street Journal that came out very aggressively against the levels.”
