Lumber row turns attention to China

VANCOUVER, Canada - A row that erupted this week between Canada and the United States over softwood lumber exports proves that Canada must expand its trade to China and other Asian markets, officials said.

Canada's government and the lumber industry must quickly diversify their export markets to reduce reliance on the US, Premier of Canada's British Columbia province Christy Clark said.

"We have already increased our softwood lumber exports to China by over 2,000 percent with strong progress in other markets," she said.

"We are going to continue to work on that. It is our hope that one day our markets will be so diversified that we don't need another softwood deal with the United States," she said.

This week, the US slapped Canadian softwood lumber with new import duties ranging from 3 to 24 percent, starting next week.

In recent decades, US administrations have occasionally blasted the Canadian lumber industry as unfairly subsidized, claiming that Canadian softwood is being "dumped" into the US market at costs that undercut US forest producers.

The US lumber industry argues that because most Canadian timber is harvested on government-owned land, the resulting low prices for the right to harvest that wood has kept Canadian lumber below market value.

However, David Emerson, British Columbia's special trade envoy to the US, said the new tariffs were a "shakedown" that mirrors previous attacks on Canadian lumber by the US.

"Hopefully (this fight) will cause Canadians to reflect deeply about the importance of building trade bridges with other parts of the world, and for British Columbia, that's really largely going to involve Asia," he said.

Canada exports about C$4.8 billion ($3.54 billion) in total forest products to China annually, including about C$1.6 billion in lumber.

Over the last 10 years, Canadian forest product exports to China climbed from 5 to 15 percent of the country's total forestry exports - a fraction of its lumber exports to the US.