When the U.S. enters trade agreements, we should go into them with eyes wide open. We need to consider not only the parameters of a deal, but also how we plan to enforce it. Doing so ensures that we have the best interests of our workers and businesses in mind. Unfortunately, the Softwood Lumber Agreement (SLA) that so directly impacts Maine is failing on the enforcement side.
The issue at hand is the U.S. lumber industry's complaints against British Columbia's illegal stumpage pricing scheme, which sets stumpage fees for lumber harvested on public lands in Canada artificially low. This practice, along with other Canadian government programs, creates an illegal subsidy. But here's the rub: it will be a full five years by the time this case is resolved.
The tribunal that will handle this case has set a hearing for March 2012. That's nearly five years after documentation of Canada's violation of the agreement was brought to the attention of the office of the United States Trade Representative (USTR), the agency that is charged with negotiating and enforcing U.S. trade agreements. While it's good that the proceedings are underway, I'm extremely disappointed with the initial delays and feet-dragging by the USTR that has resulted in postponed relief for American lumber companies.
Given that these types of international proceedings on trade enforcement are often drawn out and without quick resolution, it is crucial that USTR acts expeditiously when complaints about trade violations are brought to its attention. Five years is far too long to wait for Maine's lumber industry, which is only asking for a level playing field to compete on and effective enforcement of the SLA. Unfortunately, this delay has direct and real consequences for our state.
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. Failure to enforce this agreement in a timely fashion has dealt a significant blow to Maine's $702 million lumber industry and caused employment declines and economic hardship in communities across the state.
In fact, from 2006 to 2008, Maine lost one sawmill factory each year. In 2010, two additional mills closed, and so far this year another one shut its doors. This represents a 24% decline in Maine's sawmills in the last five years alone. According to the Bureau of Labor Statistics, employment in the sawmill and wood preservation sectors nationwide was 118,530 in 2006. By 2009, that number had fallen to 89,840.
But it's not just the direct job losses that are a concern. The Department of Commerce calculates that each job in the lumber industry supports 4.5 more, which means nearly 130,000 jobs were lost between 2006 and 2009 as a result of the decline in the sawmill sector.
To protest the snail paced action in this case, I recently sent a letter to USTR expressing concern over the delays. In my letter, I included a letter written to me by Ralph Dwyer, the Town Manager of Ashland, Maine, who underscored the need for timely enforcement of the SLA. Dwyer said that without expeditious evaluation of complaints and initiation of consultations and arbitration when appropriate, the U.S. lumber industry in Maine will disappear.
This is a dire warning from someone who knows what he's talking about. It is a very real example of how our trade agreements affect main streets across the country. Unfortunately for us, this one's in our backyard and affecting families throughout our state.
Maine jobs do depend on timely action and enforcement when it comes to the trade agreements our country negotiates with other countries. I can only hope that when this administration works to renew the SLA that it will do so with a focus on enforcement. That way we can provide our workers and businesses with the level playing field they deserve and provide them with timely relief when rules are broken.
Representative Mike Michaud