Canada's Softwood Lumber Dispute: Another Hurdle in the Staples Trap
by Jhunt08 on October 6, 2017 - 7:06pm
Canada and the United States share one of the most stable and profitable alliances in the world. Geographically speaking this relationship was inevitable, the Canada-United States border is the longest in the world and both countries are relatively isolated from other trading partners. Canadians and Americans also share a similar culture and colonial past that simplifies any collaboration between the countries. Despite this there are quarrels in every relationship and one of the most incessant is our conflict over softwood lumber.
The source of this debate comes from how each country manages their forests. If a lumber company wanted to extract wood in Canada they would pay the government a set price for the land they wish to harvest from. In the United States lumber companies must compete in a competitive bidding war for extraction rights due to lumber lots being privately owned. These different methods result in American logging companies paying far more to extract the same amount of lumber. Since 1982 the United States have been fighting to put tariffs on Canadian softwood lumber claiming that they can’t compete. Until recently, NAFTA has prevented these tariffs as the agreement forbids taxing goods that aren’t subsidized. However, with the election of Donald Trump and his isolationist campaign we have seen the implementation of a ~20% tariff on Canadian softwood lumber.
In my opinion, the United States has very little grounds to stand on in this debate. However this doesn’t really matter, the US government is defending its own interests like any state would and there is little we can do to change this. In order to defend our own interests in this conflict and other trade disputes Canada must first escape the staples trap. The term staples trap refers to a country’s dependence on the extraction and export of natural resources. A country that has fallen into the staples trap is eliminating opportunities for work and destabilizing their economy. Rather than finding alternative trading partners or fighting the tariff on soft lumber the most pertinent solution is to use our resources for production.
The New World was originally settled for the extraction and shipment of resources and Canada has been trapped in this mindset since its creation. The United States however focused on production and eventually grew to become the largest economy on the planet. While there are countless geographic and historical reasons for the United States becoming what it is today, if it never escaped its resource trap the United States would be far less dominant. The US dollar is a standard for the worlds currency because it isnt dependant on the volatility of natural resources. By using more of the resources we extract we could open up countless work opportunities for Canadians that we are currently giving to more developed economies. To protect its soft lumber and other resources, Canada needs to encourage local production and leave its colonial past behind.
Charron, M. (2005, September 19). Lumber I to IV: History of the Canada-U.S. Softwood Lumber Dispute. Retrieved October 06, 2017, from https://lop.parl.ca/content/lop/ResearchPublications/tips/tip134-e.htm Evenden, M. (2015).
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Nicholas, P. (2017, April 24). U.S. to slap 20% tariff on Canadian softwood lumber imports. Retrieved October 06, 2017, from http://www.marketwatch.com/story/us-to-slap-20-tariff-on-canadian - softwood-lumber-imports-2017-04-24