Calgary economist – lumber deal still possible

Calgary economist thinks softwood lumber deal with the U.S. could be reached despite Trump’s anti-trade talk.

  • Thu Nov 17th, 2016 7:00pm
  • News

By Ezra Black

A Calgary economist thinks B.C. could seek a softwood lumber deal with the U.S. despite Trump’s anti-trade talk.

During his campaign Trump repeatedly inveighed against free trade accords like the North American Trade Agreement (NAFTA) and vowed to renegotiate the deal. He even threatened to withdraw from the agreement if he didn’t get his way.

But Trevor Tombe, an assistant professor of economics at the University of Calgary, does not think the president-elect is as opposed to free trade deals as he appears to be.

“He’s not anti-trade if you read his comments in a nuanced way,” he said. “He thinks they’re bad deals and he wants better deals. What the characteristics of a better deal are, are not explicitly defined.”

Tombe said renegotiating NAFTA or a similar trade deal to include provisions on softwood lumber could benefit B.C.

“The reason why the softwood lumber dispute continues to arise is because it isn’t a part of NAFTA,” he said.

NAFTA is an agreement that excludes a wide variety of sectors including energy, agriculture and softwood lumber.

Tombe said the exclusion of softwood lumber from the agreement is an example of how trading relationships can go wrong when they are not covered by formal trade deals.

“It leads to protectionism demands that are hard to resist on both sides of the border,” he said. “There is scope for a better deal from everyone’s perspective. The NAFTA that was signed 22 years ago could be improved if the three countries sit down and begin renegotiations. We can imagine putting these continual softwood lumber disputes to bed by coming up with a permanent agreement in a new deal.”

B.C. is the world’s largest exporter of softwood lumber and the United States is its biggest customer. In 2013, the province exported almost $3.8 billion of softwood lumber south of the border. The latest U.S.-Canada softwood lumber deal expired last year. Negotiations between Canadian softwood lumber executives and U.S. trade representatives are ongoing.