De Jong, whose province accounts for about half the $10-billion annual lumber export business with the United States, said the deal proffered last month by U.S. trade officials and apparently backed by the powerful American lumber lobby is too murky when it comes to achieving free trade. "That blueprint is awfully blurred," de Jong told the B.C. Truck Loggers Association annual meeting.
"I'm inclined to agree with those that say unless there can be greater clarity built around the manner in which you move from this managed-trade situation to genuine free trade, then we have a problem with this proposal."
The December proposal would lift the 27.2 per cent average combined countervailing and anti-dumping duties imposed in May 2002 based on American producer complaints of subsidy and below-cost selling.
The countervailing portion of the duty has since been reduced to about 13 per cent from 19 per cent after a NAFTA panel hearing a Canadian appeal questioned the U.S. calculations.
The proposed agreement also caps Canada's softwood exports at 31.5 per cent of the U.S. market, down from its current share of roughly 34 per cent. Sales above the ceiling would be subject to a prohibitive levy of $200 US per 1,000 board feet.
Producing provinces and forest companies would have to work out a quota system similar to the one used in a five-year managed-trade agreement that expired in 1996.
Provinces that reform their forest policies to make them more transparently market-oriented could get out from under the quota.
Canada would also have to agree to let American producers keep 48 per cent of the $1.6 billion duties collected since May 2002.
The agreement would have a three-year term but be renewable annually for two additional years while reforms are undertaken.
But many major forest companies, along with governments in Ontario, Alberta and Quebec, quickly rejected the proposal, which also requires Canada to drop its legal challenges before the World Trade Organization (news - web sites) and NAFTA.
Newly minted federal Trade Minister Jim Peterson delivered the news to his U.S. counterparts in Washington, D.C., on Monday but said he remained optimistic a deal could be reached.
De Jong, however, added more cold water, focusing on concerns about the fairness of any national quota arrangement.
Quota will continue to be discussed, he said. But he promised British Columbia, whose high-cost coastal forest sector has been hit hard by the duties, would not use some of its quota to buy support from other Canadian producers for a deal.
"That's not going to happen," he said.
British Columbia is pressing ahead with legislated changes to its forest policies aimed at helping bring down costs, especially for coastal producers whose operations now are closed much of the time.
But he admitted the transition could cost more forestry jobs.
De Jong said there's an overcapacity in the B.C. forest industry and a $75-million government fund set up to offset job losses because of redistribution of Crown logging rights may not be enough.
"Most people want to continue working but some people are going to be impacted by a tenure-reallocation process," he told the truck loggers, independent logging contractors.
De Jong also took a swipe at environmentalists who continue to urge boycotts of B.C. forest products abroad over logging practices.
He held up an edition of the China Daily, an English-language newspaper sold in China, which included an advertisement asking customers in one of the province's only growing markets to stop buying B.C. wood.
"I for the life of me cannot understand, cannot accept and will not countenance people trying to put you out of business," de Jong told the meeting.
The anti-logging activists know they have little sympathy within the province and no appetite for trying to push their views in forest-dependent communities, he said.
"I think they lose their nerve after they get outside of the cappuccino zone," said de Jong.
But he also said it's up to the industry to defend its forestry practices.
"You're going to have to stand up for what you do," de Jong said.
