Free trade only works when fair trade is enforced

Free trade only works when fair trade is enforced
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There has been a lot of discussion around global trade and America’s trading partners. What’s important to remember is that enforcing fair trade isn’t a partisan issue, and it’s not about scoring political points.

Fair trade is about free trade, and the United States has a right to promote free trade for its industries and workers and an obligation to enforce our international trade laws.   

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A perfect example of fair trade free of partisanship is the longstanding friction the United States has had on softwood lumber imports from Canada.

 

I’ve spent over four decades in the wood products industry and have witnessed firsthand the damage Canada’s unfair trading practices have had on lumbers mills in the United States.

In short, Canada’s government has been cheating the rules — giving hefty subsidies to Canadian lumber mills so they can sell their lumber at distorted prices in an effort to push out U.S. producers and monopolize the market.

Every president since Ronald Reagan has fought for the U.S. lumber industry and the 350,000 Americans it represents. One year ago, after a thorough investigation, the U.S. Department of Commerce determined that Canada once again wasn’t playing by the rules and levied duties against Canadian softwood lumber.

These duties have leveled the playing field for American lumber mills and for hundreds of thousands of Americans employed in the U.S. lumber industry. This has been crucial in helping promote growth at my mill, Westervelt in Tuscaloosa, Alabama, and in lumber mills across the United States.

It’s important to keep in mind, fair trade isn’t just about the industry, or in this case, selling more lumber. It’s about a chance to compete on equal footing, so we can grow and meet customer needs for lumber.

Not only are we producing more lumber to help build more homes, we are creating jobs and making rural communities more bustling and vibrant. This spring, Westervelt announced we are building a new lumber mill in south Alabama.

This new mill will create 100 local jobs and produce 250 million board feet of lumber annually — that’s enough American lumber to build almost 17,000 new single-family homes. It doesn’t stop there. New softwood lumber investments are planned in Oregon, Georgia, Louisiana and many other communities across the country.

Aside from direct jobs, these new mills create hundreds of indirect employment opportunities across rural communities. From the logger to the trucker to the waitress in the diner, the new mills are fueling job growth.

The numbers speak for themselves. When fair trade is enforced, the U.S. industry is able to flourish, grow and drive economic development across local communities.

This is all good news. While enforcing fair trade should be free from politics, there will always be outside special interests advocating for what’s cheap rather than what’s fair.

Commodities, like lumber, continually have price fluctuations based off several factors — such as supply and demand, natural disasters and transportation costs. While prices fluctuate, what doesn’t change is that the impact of these prices on housing affordability is virtually nil. 

Only 2 percent of the cost of a new home is in lumber materials. Since the mid-1990s the share of cost of lumber in a new house has trended downward, while the size of the average home has increased. Meanwhile, the total price of a new home has doubled, and homebuilder per-house profit has more than doubled.

It’s unfortunate that powerful groups have aligned with Canada to spread false facts. Even worse, their efforts have prodded members of Congress to advocate against American lumber and support Canadian lumber.

Through all the noise, it should be clear this softwood lumber dispute is about enforcing rules-based trade so U.S. industries don’t get cheated by other countries. 

Free trade only works when fair trade is enforced. For lumber, a level playing field has helped this industry begin to reach its full potential, so we can hire more workers, and help build more American homes with American lumber. 

Joe Patton has over four decades experience in the wood products industry, serving as vice president of wood products at The Westervelt Company.