The term "lobby" dates to 17th century London when interested persons could literally be found in the lobby of the House of Commons cajoling parliamentarians to vote this way or that. There, and soon after in Washington, lobbyists were a disreputable sort. They worked the backrooms, thwarted the democratic process, and were implicated in all manner of bribery and extortion. Since then, their status has been elevated considerably and they are now often legally registered and have been institutionalized in the US into what some call the "Third House of Congress." Nevertheless, the stigma persists, and for good reason - the "backroom" nature of much of their work can only leave people guessing, after the passing of various laws or rulings, as to precisely who was the real grey eminence behind the throne.
Such it is with recent US International Trade Commission and the Commerce Department decisions imposing crippling duties on Canadian softwood imports. The conventional opinion, well-propagated by the Canadian mainstream media, is that these rulings were the handiwork of the "US Lumber Lobby." Editorial cartoons, reflecting the content of the editorials, depict a hefty man in a pinstripe suit brandishing a two-by-four over a frightened beaver. Following the lead of Federal Trade Minister Pierre Pettigrew, most commentators view recent developments in Washington, DC as "classic American protectionism." The standard theory goes as follows: Cheap, superior products were grabbing market share from domestic American producers causing the impacted businessmen to get on the horn to their congressmen who complied with high protective duties.
What's wrong with this picture? Primarily, the "US Lumber Lobby," to the extent to which one can say it exists at all, did not support the imposition of these duties. Recent ads opposing the Commerce Department's and ITC's decisions have been signed by Weyerhaeuser, LP (formerly Louisiana Pacific), Pope and Talbot, Bowater and others. Weyerhaeuser is America's largest lumber producer, and LP is not far down the list.
I asked Weyerhaeuser spokesmen, Frank Mendezabel, if he knew of any definitive study showing what portions of the US softwood lumber industry opposed or supported the recent Commerce Department rulings. He did not know of any such study but guesstimated the pro-protectionist Coalition for Fair Lumber Imports represented 50% to 60% of the industry. He is being generous. I know of two other studies putting CFLI's members' share of the action at 30%. (CFLI's trade lawyers, Dewey, Ballantyne, disingenuously claim to be representing firms controlling 75% of US lumber production - exclusive of firms with Canadian operations - which, if anything, is a confession to representing less than half the industry.)
Suffice to say the "US lumber lobby" is deeply conflicted on this issue. Therefore, we are not dealing with "classic American protectionism." According to that model, these groups would cancel each other out. Presumably, Uncle Sam would be loathe to violate NAFTA and the FTA, ruffle the feathers of their principal ally and trading partner, and flaunt the free market ideology of the sitting President unless the affected producers were clearly and overwhelmingly onside.
To make sense of this we need examine the other lobbies grinding on the US government regarding this issue. On the free trade side of the debate are a host of powerful retailers such as Home Depot, and literally thousands of American lumber dealers, home construction companies, and affordable housing activists. They argue these duties will drive up the cost of housing and will make alternatives to lumber more attractive. In spite of their good intentions and the broad support these groups have, the protectionist side of the debate has a supporting lobby which completely trumps them - Big Green.
Mendezabel did not think the American environmental movement played a crucial role in the debate. However, he did indicate the Canadian environmentalists were a factor. What he could be forgiven for not knowing is that the Canadian eco-movement is one of the best examples going of a branch-plant economy. As I, and others, have pointed out conclusively in separate writings, tens of millions of dollars per year are flowing from Big Green USA to the Canadian environmental movement. Dozens of enviro-NGOs like the David Suzuki Foundation, Sierra Club BC and Eco-Trust collect large cheques every year from a variety of American foundations to spread the gospel of underdevelopment in the northlands.
A dozen of these groups formed the BC Coalition for Sustainable Forest Solutions (BCCSFS) to help the protectionist lobby in the US impose penalties on Canadian, particularly BC, lumber. On the main political/legal issue in the trade dispute - whether or not Canadian timber is subsidized - the BCCSFS has come down firmly on the side of the US protectionists. Even though Canadian unions, businesses, and governments are unanimous in their denial of the existence of subsidies, our Ecos, with pockets bulging with American green, have taken the contrary view, issuing the publication Cutting Subsidies or Subsidized Cutting? This document makes wild and novel claims about an alleged $6 billion in subsidies to the BC forest industry and beseeches Premier Campbell to live up to his free market values by eliminating them. These assertions have been given a wide reading in America's corridors of power and of course carry extra weight because they come from Canadians.
South of the 49th, the American environmental movement has used the research of their Canadian subsidiaries as part of their extensive lobbying effort. One of the eco-organizations leading the campaign against BC softwood imports, the Natural Resources Defence Council (NRDC), has propagated the assertion that BC timber is undervalued by the provincial government by between $842 and $2.6 billion per annum. The origin of this fuzzy math is none other than an "ecological economist" in the payroll of Sierra Club of BC.
The NRDC is a big outfit with an annual budget over (US$) 40 million and with the likes of Larry Rockefeller and Robert Redford on its board. The NRDC prides itself on being one the driving forces behind the creation of BC's "Great Bear Rainforest" which took millions of acres of prime timberland out of production. Last year the NRDC, along with fellow eco-bureaucracy Defenders of Wildlife, actually tried to have themselves listed as co-petitioners alongside the CFLI in the application for protection before the US Commerce Department.
Another frontline US eco-organization lobbying for punitive tariffs is the Northwest Ecosystem Alliance. The NEA was formed in 1988 and has a staff of 14. It boasts many legislative accomplishments and political victories and has adopted the blockage of BC timber as one of its pet projects. Part of their lobbying effort has been a mass letter-writing campaign to Marc Racicot, the US Special Ambassador to the US/Canada lumber dispute. The letter cries out for a linkage of trade and environmental issues. The NEA demands greater enforcement of eco-laws in Canada. They demand a modification of Canadian laws so that private citizens have free range to file civil suits against governments and logging companies. Also, reflecting the position of the BCCSFS, they call for "true market mechanisms" to be used by provincial governments to determine the amount of fees timber harvesters should pay.
The NEA receives funding from 14 separate US foundations, most notably the Bullitt, Brainerd, and W. Alton Jones Foundations, and from the Pew Charitable Trusts. The Pew Trusts are one of the top enviro-funders. Total grant giving by the Philadelphia Pews was (US$) 230 million in 2001, of which $42 million went to environmental groups. Over the last decade, suppressing forestry operations in the US and Canada has been a primary focus of the Pew Trusts. Towards this end they have helped forge the "Heritage Forest Campaign," a coalition of 500 environmental groups.
Dramatic curtailments of Canadian, particularly BC, timber harvesting has been a stated goal of Big Green USA for some time. This is happening in conjunction with major purchases of BC land by wealthy American preservationists. Eco-Trust Canada boss Ian Gill brags about facilitating this takeover and shutdown of Canadian forests.
On April 17, 2002, a North America-wide coalition of environmental groups, including NEA and the Sierra Club of Canada, requested the North American Commission for Environmental Cooperation (a sub-panel within the NAFTA framework) to launch an investigation into the toll the softwood trade is having on cross-border ecosystems. The goal, naturally, is further reductions in the Canadian timber harvest.
Hence, at a minimum it must be admitted that the lobby pressure upon the US federal government in favour of these penalties is twofold, including both the smaller, least efficient American mill operators and the international environmental elite. As between these two groups, it is the environmentalists who are clearly the most influential. Big Green has already muscled the US timber industry off US federal public lands and has placed outrageous restrictions on much of their state public land operations. The recent decision not to drill for oil in the Alaska National Wildlife Refuge (reserves worth half a trillion dollars) is ample testimony of the clout of America's eco-billionaires.
Thus the conventional view of the big bad "US lumber lobby" demanding and receiving protection is not just simplistic, it is actually inaccurate. The CFLI's Rusty Wood with his Georgia toothpick factory is not the prime mover here, merely the patsy. We are not dealing with old fashioned protectionism but with a newfangled underdevelopment strategy which will impoverish hundreds of thousands of British Columbians. This would not be possible but for the efforts of the Green Fifth Column America's eco-elite have marshalled north of the border. Them's the facts.
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