U.S. accuses B.C. of breaking pact

U.S. Trade Representative Ron Kirk has asked for arbitration with Canada over allegations that British Columbia is selling subsidized lumber into U.S. markets.

The dispute revolves around log prices for timber salvaged from a massive pine beetle outbreak in interior British Columbia. Officials from the U.S. timber industry allege that the B.C. government is selling high-quality logs from provincial forests for as little as 25 cents per cubic meter. Equivalent logs sell for about $20 per cubic meter on the U.S. open market, according to U.S. timber industry officials.

As a result of the subsidies, B.C.’s timber industry is expanding while other North American sawmills are laying off workers as a result of housing market downturns, said Steve Swanson, an Oregon mill owner and chairman of the Coalition for Fair Lumber Imports.

Swanson said the pricing violates a 2006 trade accord signed by the United States and Canada.

John Allan, president of the British Columbia Lumber Trade Council, disputes the subsidy allegations. The beetle outbreak has had a devastating impact on B.C.’s mills and timber workers, he said.

The venue for the trade dispute is the London Court of International Arbitration Tribunal.