June 20th, 2003

Roy Cullen, M.P. (Etobicoke North)
News Release

Roy Cullen M.P. scheduled to address Pacific Northwest Media Seminar on Softwood Lumber - event cancelled.

SEATTLE - Roy Cullen M.P. Etobicoke North, and former forestry executive, was scheduled to address a media seminar sponsored by the Canadian Consulate in Seattle on Tuesday June 24th. The conference was designed to provide information on Canadian forest management and the softwood dispute in light of decisions being made by NAFTA and the WTO.

In Mr. Cullen's remarks he called for new approaches to the continuing dispute between Canada and the United States over softwood lumber. He described the current process as unfair and costly to both countries - the big losers being U.S. homebuyers, and sawmill communities and workers in Canada.

"For almost twenty years softwood lumber producers in the United States have sought action by your government to restrict trade in softwood lumber from Canada. It seems to me that this dispute has less to do with subsidies, and more to do with market share," Mr. Cullen said in his remarks.

He goes on to say " How many times do we have to win the argument in front of an objective panel that we don't subsidize our lumber before this issue goes away? We are prepared to be good losers, but we want a fair process".

At the heart of the misunderstanding between Canada and the U.S.A on softwood lumber, Mr. Cullen cites four major factors -

1. the structural differences between the forest industry in Canada and that in the U.S.A;
2. a certain hypocrisy, on both sides, on the role and nature of subsidies;
3. different perspectives on the efficiency of markets; and,
4. flaws in the countervailing duty process (at least from a Canadian perspective).

In his remarks, Mr. Cullen, while acknowledging, that any meaningful changes to the current countervailing duty approach to softwood lumber would require the agreement of the U.S. Congress and Senate, called for new concepts like net subsidy which would allow a countervailing duty process to be launched if it was reasonably alleged that there was a net subsidy that exceeded a prescribed 'de minimus.' With this approach, any applicable U.S. forest industry subsidies would also be scrutinized - including subsidies at the state and local government level like sales tax abatements, property tax reductions, tax-free bonds, investment tax credits, cheap industrial land, and favourable energy co-generation agreements.

Alternatively, if the softwood industry is an integrated North American market, which we know it is, why not examine these trade disputes from the sole perspective of competition policy. In other words, price collusion or price fixing, monopoly pricing and cartel-like behavior would have to be proved. Mr. Cullen suggests in his speech that we could then focus our joint attention on expanding the use of wood products - in our integrated North American markets, as well as export markets. After all, on a life cycle basis wood products are better for the environment than steel, bricks and mortar, vinyl, and other substitutes.

A third approach he advances would be to have all Canada-U.S.A trade disputes automatically 'fast-tracked' through an independent and objective agency - an organization like the International Joint Commission - which plays a similar role today on a host of Canada/U.S.A matters.

In his closing remarks Mr. Cullen notes -" Why bother, you might well ask. Well, for one, if we value the relationship that the U.S.A and Canada have, that in and of itself might be sufficient enough. That could be wishful thinking, however.

I believe we need to work together for a new bargain between Canada and the United States, along the lines suggested recently by former Ambassador Alan Gotlieb -one that reflects today's realities and that respects our differences as well as our common interests and cultures. A bargain that covers important bilateral public policies like defense, border security, energy and trade.

I am confident that we can leave behind many of the irritants of the past - irritants that have harmed our important relationship - and move forward with confidence, as partners and neighbours, into this new and more complicated world - with hope and prosperity for all."

For a full text of Mr. Cullen's remarks please visit www.roycullen.com.

For more information, please contact:
Ryan Hordy, Executive Assistant
Room 317, West Block
613-995-4702