NEWS RELEASES
PETTIGREW ANNOUNCES $20 MILLION FOR LUMBER AWARENESS AND TRADE ADVOCACY INITIATIVES
May 27, 2002 (10:20 a.m. EDT) No. 58
PETTIGREW ANNOUNCES $20 MILLION FOR LUMBER AWARENESS AND TRADE
ADVOCACY INITIATIVES
International Trade Minister Pierre Pettigrew today announced that the Government of Canada will contribute $20 million
to help Canada's softwood lumber industry raise awareness in the United States of the impact of punitive U.S. softwood
lumber duties on U.S. interests, and to step up Canada's advocacy efforts in the United States.
Funding of $17 million will be provided for Canadian lumber associations, led by the Forest Products Association of
Canada, to undertake a softwood industry-led campaign to raise awareness of the negative impact that softwood lumber
duties will have in the United States, and to encourage productive negotiations and a resolution of this dispute. An
additional $3 million will enhance the ability of the Canadian embassy and consulates in the United States to advance
Canadian positions on key trade issues.
"In addition to hurting Canadians, punitive U.S. lumber duties also hurt American consumers, home builders and workers,"
said Mr. Pettigrew. "We fully support our industry in its efforts to bring these damaging costs to the attention of
Americans. When they realize that these duties favour the few at the expense of many, perhaps Americans will see the need
to resolve the dispute in a reasonable way."
These measures complement the $75 million in funding announced by Natural Resources Minister Herb Dhaliwal on May
16, for three initiatives to ensure the long-term prosperity and competitiveness of Canada's forest industry.
"We will use the enhanced advocacy resources to reinforce the efforts of our embassy and consulates against rising
protectionist actions in the United States," said Minister Pettigrew. "In Washington and elsewhere in the United States, we
will aggressively voice our concerns about U.S. actions in sectors such as lumber, agriculture and energy."
The Government of Canada will continue to pursue World Trade Organization and NAFTA challenges against the United
States, while still remaining open to a durable negotiated solution. It is anticipated that a better understanding of the issue
among U.S. interests will lead to a stronger desire by the U.S. administration to break the current stalemate and return to
the negotiating table with reasonable proposals.
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Two backgrounders are attached.
For further information, media representatives may contact:
Sébastien Théberge
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
http://www.dfait-maeci.gc.ca
Backgrounder
CANADIAN DIPLOMATIC REPRESENTATION IN THE UNITED STATES
Canada's most important bilateral relationship is with the United States. Reflecting this, the Government of Canada
maintains an extensive network of offices in the United States for representational purposes. They include:
• the Embassy in Washington, D.C.;
• 10 Consulates General located in Atlanta, Boston, Buffalo, Chicago, Dallas, Detroit, Los Angeles, Minneapolis, New
York and Seattle;
• a Consulate in Miami; and
• a Trade Office in San Francisco and Silicon Valley.
The role of the Canadian Embassy is to deal with the complex and multi-dimensional relationship between Canada and the
United States. Its focus is on the U.S. administration, Congress, important think tanks and NGOs located in the Washington
area. The Consulates General have responsibility for specific geographic parts of the United States. The services they
provide include the promotion of trade and investment, assistance to Canadian citizens visiting and living in the territories
they cover, encouraging tourism, enhancing academic and cultural relations, and fostering the historically close friendship
between the two nations. Other Canadian offices play a complementary role to that of the Embassy and Consulates General
in specific areas that do not require high-level representation.
Advocacy for Canadian interests is an important priority for all Canadian offices in the United States. Canadian diplomats
work through an extensive network of contacts and allies to sensitize U.S. decision makers to Canadian concerns and
promote the Canadian position on specific issues. Over the last year, areas of focus have been the Canadian contribution to
the international campaign against terrorism, softwood lumber and the promotion of Canadian objectives on border
management. Other important advocacy priorities have been steel, forestry practices, the Arctic National Wildlife Reserve,
water diversion projects and runaway film production.
For more information on the role of Canadian diplomatic missions in the United States, visit the Canada-U.S. Relations
Web site of the Department of Foreign Affairs and International Trade: http://www.can-am.gc.ca
Backgrounder
THE CANADA-U.S. SOFTWOOD LUMBER DISPUTE
WHAT AMERICANS ARE SAYING ON . . .
Rising softwood lumber prices and their impact on new home buyers
• "The home-builders' association claims the export tax would add $1,000 to the price of the average home, which would
mean in turn that 300,000 families that would otherwise qualify for mortgages would now not do so."
--Washington Post, March 21, 2002
• "The Bush administration has once again reared its protectionist head. Erecting new trade barriers against softwood
lumber from Canada is a dismal encore to the recent steel sellout. Just as American steel-consuming industries will bear the
brunt of the steel tariffs, hundreds of thousands of American families have just been priced out of the dream of home
ownership by this new tax."
--Brink Lindsey, Director of the Cato Institute's Center for Trade Policy Studies, March 22, 2002
• "Every day there is something that adds to the cost, whether regulation or building costs, and it really hurts production
and it is very hard on those folks who are trying to get into the housing market for the first time."
--Bob Rivinith, CEO of the California Building Industry Association, speaking about the U.S. International Trade
Commission's decision to impose a 27 percent tariff on Canadian softwood, in the San Francisco Chronicle, May 3, 2002
• "While $1,500 may not sound like much to some people, for many first-time homeowners and seniors seeking to lower
their housing costs in retirement, it is the difference between being able to buy a home for the first time, or not."
--Susan Petniunas, Spokesperson for American Consumers for Affordable Homes, in Real Estate Finance Today, May 6,
2002
Increasing job losses resulting from the new duties imposed on lumber from Canada
• "Protecting the lumber industry will raise the price of each new home by as much as $1,500, estimates the National
Association of Home Builders. If consumers eventually recoil from rising prices for steel and wood products, both tariffs
will cost more jobs than they protect."
--Chicago Tribune, March 29, 2002
• "Of course, more expensive homes also mean that fewer new ones will be built and jobs will be lost. The home-building
industry employs 30 times more people than the domestic lumber industry that is lobbying for the export-tax protection."
--Washington Post, March 21, 2002
Protectionist measures undermining America's credibility as a free trading nation
• "He [President Bush] promised Latin American leaders last week that he would try his darndest to expand the North
American Free Trade Agreement (NAFTA) to their hemisphere. At the same time, his administration imposed a 30 percent
duty on Canadian lumber--in violation of NAFTA."
--Detroit News, March 29, 2002
• "'Trade produces liberty and freedom,' said the [U.S.] president. 'The U.S. is one of the most open markets in the world
and we intend to keep it that way.' But he sure has an odd way of showing it. Just a day before the president uttered those
words, his administration decided that the only way to protect the U.S. lumber industry from those nasty Canadians was to
slap 29 percent tariffs on softwood lumber--such as that used in building homes--that is imported from north of the
border."
--Chicago Tribune, March 29, 2002
• "[The U.S. administration's actions on softwood and steel] possibly could undermine discussions around the world about
market openings. They undermine our credibility as proponents of free markets. It's disingenuous for him [President Bush]
to preach free trade to developing countries and then try to protect our market from products coming in from both
developing and developed nations."
--James Gerber, Professor of Economics at San Diego State University, in the San Diego Union-Tribune, March 26, 2002
• "[The U.S. Administration's] recent tariff action on steel imports is one more in a current laundry list of protectionist
policies that frustrate America's trading partners. Agriculture subsidies, textile tariffs and quotas, and antidumping
measures mar the nation's trade record and ultimately limit trade. Americans lose access to better products, and businesses
lose opportunities to grow. The United States simply cannot move ahead by raising or continuing to maintain such barriers
to trade."
--Sara Fitzgerald, Trade Policy Analyst in the Center for International Trade and Economics, Heritage Foundation, April
30, 2002
• "The farm bill threatens to put the United States in violation of the Uruguay Round of multinational trade talks. It may
also keep us from negotiating lower tariffs among countries belonging to the World Trade Organization and establishing a
Free Trade Area of the Americas--both major goals of the Bush administration."
--Dean Kleckner, Wall Street Journal, May 9, 2002
• "All in all, the trade news since the steel decision has been downhill. We hope Mr. Bush can reverse the slide by winning
trade promotion power from the Senate, or else there really will be some buyer's remorse."
--Wall Street Journal, May 10, 2002
• "U.S. credibility on trade, internationally, is hovering near zero. Many people are eager to find excuses not to move
forward."
--Brink Lindsey, Director of the Cato Institute's Center for Trade Policy Studies, in the National Review, May 20, 2002
• "Free trade promotes competition, which keeps companies on their toes to produce efficiently. Free trade also provides
choice to consumers and businesses who can now go online to purchase the best quality goods at the lowest available prices
anywhere in the world. In short, free trade throws off enormous benefits, and Congress shouldn't dare stand in its way."
--Lawrence Kudlow, Columnist, Washington Times, May 22, 2002
"Unfair" Canadian stumpage fees
• "The Canadian provinces, which own most timberland, use a different system. They sell long-term, renewable licenses to
timber firms to manage the forest and harvest the timber--combining what in the United States would be Forest Service
responsibilities with those of a logging firm. Canadian firms are required to build their own roads, protect environmental
values and do many other Forest Service-like tasks. The price for harvested trees is set administratively by the provincial
governments, which believe they do a good job of establishing a reasonable market value. That belief is shared by groups
representing American home builders, organizations like the Cato Institute and the Congressional Research Service.
--Minneapolis Star Tribune, March 31, 2002
For more information on this issue, visit:
Department of Foreign Affairs and International Trade
http://www.dfait-maeci.gc.ca/~eicb/softwood/lumber-e.htm
American Consumers for Affordable Homes
http://www.acah.org
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