Maine’s federal delegation cheered news Monday that the U.S. and Canada extended a 5-year-old softwood lumber agreement through 2015, but called for more consistent enforcement of the controversial pact.
Originally set to expire in 2013, the multibillion-dollar agreement aims at addressing unfair Canadian lumber subsidies undercutting American industry. Unlike American manufacturers, Canadian producers can be subsidized by their provincial governments in the form of smaller fees charged for timber harvested from government land.
U.S. Trade Representative Ron Kirk and Canadian International Trade Minister Ed Fast announced the two-year extension Monday. U.S. Sens. Olympia Snowe and Susan Collins and U.S. Rep. Mike Michaud cheered the continuation of the agreement.
Under the agreement, the U.S. stops collecting countervailing and anti-dumping duties on Canadian softwood lumber while Canada imposes taxes and quantitative restrictions on lumber exports to the U.S., according to the U.S. Lumber Coalition, which supports the agreement.
“A two-year extension of this historic and critical Softwood Lumber Agreement is welcome news, and provides Maine’s lumber industry with a modicum of certainty moving forward,” Snowe said in a statement. “A return to the conditions prior to the agreement would be devastating for Maine lumber companies, who can compete with anybody when the conditions are equal.”
“In rural areas of Maine, sawmills can be the primary economic engines of towns. When they close down they can take entire communities with them,” said Michaud, a former paper mill worker from East Millinocket. “All our lumber industry wants is a level playing field and an extension of the SLA can provide that.”
Maine lost one sawmill factory a year from 2006 to 2008. In 2010, two additional mills closed, and at least one shut its doors in 2011, Michaud said in his statement.
The closures represent a 24 percent decline in Maine’s sawmills in the last five years. The U.S. Department of Commerce estimates that nearly 130,000 jobs were lost between 2006 and 2009 due to the sawmill sector’s decline, Michaud said.
Enforcement of the accord has been spotty. The London Court of International Arbitration said eastern Canadian producers violated the agreement in 2007 by exceeding their export quotas, fining the producers about $68 million in Canadian money, or what was then worth about $53.6 million in U.S. currency.
But U.S. buyers spent more than $7 billion on Canadian softwood lumber in 2007, according to industry estimates.