Log auctions and exports a big no go ecent calls by some B.C. forest company leaders and analysts to convert to an auction-based timber sales system and to eliminate log export restrictions are a non-starter for our union, and they should be for all British Columbians. The Council of Forest Industries and MacMillan Bloedel’s aggressive new CEO, Tom Stephens, should know better than to pro- pose simplistic solutions for a complex industry. A free market sales system would not lead to open U.S. mar- kets for B.C. lumber products any more than the lifting of log export restrictions would. The U.S. Coalition for Fair Lumber Imports is a polit- ical animal which cannot be tamed by alternate trade practices or trade court cases. Since 1983 the Coalition has tried every trick at its disposal and has fought, by hook and by crook, to stop Canadian lumber imports from increasing. It cannot be appeased. A few months ago the Coalition must have rubbed its hands in glee when Mr. Stephens, a former member, declared that, in his opinion, the B.C. industry is subsi- dized. The Coalition couldn’t have asked anyone in B.C. to make a more damaging statement. The call for removing log export restrictions would undermine the security of B.C. forest industry workers and their com- munities. As it is, when markets are good, there are shortages of sawlogs for B.C. mills. When lumber prices heat up, auction timber sales would cause ruinous over- bidding. I.W.A. Research Director Doug Smyth pointed out in his discussion paper, In Search of Solutions for the B.C. Forest Industry, that when lumber prices shot up in the early 1980’s speculative overbidding in the U.S. Pacific Northwest was so rampant that the entire industry was pushed to the point of bankruptcy. Only the passage of massive bailout legislation by the U.S. Congress headed offa major disaster. During the 1990's speculative excesses caused traumatic job losses for workers and communities. If B.C. sawmillers are forced to bid against U.S. companies for timber, they may not be able to compete. A surge in the value of the U.S. dollar and Japanese yen could easily wipe out any competitive advantage that Canadian producers thought that they had enjoyed. Remember, if the U.S. is allowed to freely bid on our timber, then what is to stop the Japanese from doing the same? When the Japanese yen bounces back, our log exports would be cheap for that country. Even the United States imposes strict legal restric- tions on log exports from federal and state lands. It is extremely unlikely that those constraints will be removed. Log export restrictions are intended to protect B.C. jobs and communities. Exporting logs means exporting jobs from this country — it’s simple. The I.W.A. believes that it is important to reform the current B.C. tenure and stumpage systems. In order to reduce wood costs per thousand board feet of lumber produced and encourage the manufacture of greater volumes of value added products, it is important to set up incentives for companies to “get the right log to the right mill.” Increased log sorting and trading between B.C. companies will help the industry to compete in USS. and global markets. Doug Smyth has said that there is no point “in throw- ing the baby out with the bath water” in order to appease the U.S. Coalition. If the B.C. industry ever wound up in the same state of potential financial ruin as the U.S. west did in 1983 as a result of speculative overbidding, does anyone believe that the U.S. Coali- tion would permit a massive legislated bailout of the B.C. industry similar to the one that the U.S. Congress carried out during that year? Not likely! LUMBERUORKER Official publication of the Industrial, Wood and Allied Workers of Canada ARC DAVE HAGGARD . . President Norman G: ne NEIL MENARD .. Ist Vice-President Editor HARVEY ARCAND . . 2nd Vice-President DAVID TONES . . 3rd Vice-President bth Floor, NORM RIVARD . . 4th Vice-President 4985 W. Pender Street WILF McINTYRE . .5th Vice-President rancouver, TERRY SMITH . . Secretary-Treasurer V6E 4B2 BROADWAY @ PRINTERS LTD. GANZ \N Zz s § 2 Z : a w ez x zg 8 ee Ss IS Ey Failure of MAI at the OECD is a say federal Liberals ‘footnote’ The attempts by multina- tional corporations to get a Multilateral Agreement on Investment (MAI) into place may have ended in failure at the Organization for Eco- nomic Co-operation (OECD) on October 20, but we can rest assured that the world’s wealthiest nations are still pushing for such an invest- ment pact. In the forefront, of course, is the federal Liberal gov- ernment of Canada. Liberal Trade Minister Sergio Marchi said that “it became obvious that the end of the road had approached (with the OECD) and that a new road has to be opened up.” Marchi said that the Cana- dian government and others will be pushing to drive a multilateral agreement on investment rules within the World Trade Organization, which is by no means any more democratic an institu- tion that is the OECD. “Ultimately that (the WTO) is where a deal has to be made,” said Marchi, who added that the OECD made progress on a “concept whose time has arrived.” The MAI negotiations fell apart a week earlier when France unilaterally pulled out. That country’s Socialist Prime Minister ‘Lionel Jospin said “that given the recent upheaval, the sudden and sometimes irrational movement of markets, it does not seem wise to allow pri- vate interests to chew away at the sovereignty of states.” Like Canada, France had concerns over the MAI in relations to the protections of national culture, labour standards, and environmen- tal standards. As France pulled out of the deal, Marchi said there was nothing to worry about anyway. Questioned when he was courting a bunch of investors in Atlanta, Geor- gia, Marchi said the crash- ing of the MAI at the OECD was nothing to worry about. “I don’t think we should lose too much sleep,” he told the media. “...We have always said that the OECD is just the start of that jour- ney (and) that the home (for the MAI) has finally to be the WTO.” Added Marchi: “...only at that (WTO) level will we have an effective multilat- eral rules regime for invest- ment.” He added that the failure of the MAI talks at the OECD are only a “foot- note.” Canadian corporations and investors directly invested over $193.7 billion outside of Canada in 1997. It is quite doubtful that this amount of money, which exceeds the amount of for- eign investment that is actu- ally made in Canada, would be made without some very good guarantees in place already. Why then would the multi- nationals and their Liberal proxies in government go to the WTO to formulate invest- ment rules and policies? It is an international trade organization that has no mandate to do so. The WTO is dominated by the United States, countries of the European union and Japan. By exercising their power over an MAI inside the WTO, all of the under- developed member nations of that organization would be forced to join. That means Third World countries in Latin America, Asia and Africa would be forced to accept investment rules that would be formu- lated by the rich nations. If twenty-nine of the world’s richest nations couldn’t get their act together at the OECD to agree on what an MAI would finally contain, why would the WTO bea better place? After the MAThit the rocks, the Globe and Mail quoted a Senior Canadian official say- ing the deal fell apart because of countries’ apprehension that it would encroach on their sovereignty. So why would any govern- ment even get near a deal that would? The answer lies in the fact that the wealthy nations, who represent the wealthy capitalists, treasure more the protection of foreign investment than they do peo- ple living in countries. Noted international trade lawyer Barry Appleton and his associates say that the goal of the MAT is to “impose limits on how governments treat foreign investors and their investments. Indeed, so strong are these protec- tions that the MAI can prop- erly be called the most far reaching (proposed) interna- tional investment agreement in the world.” Appleton points out that “individual investors have direct legal rights that can _be brought to an interna- tional tribunal without the agreement of their home gov- ernment.” That means they would have the kind of rights which would override democrati- cally elected governments. In fear of being sued under an MAI, Appleton says that governments, which are ever-facing decreasing dis- cretionary.spending, would “begin to modify their poli- ‘cies so they can avoid the high damage awards that panels could assess. With an increased class of people free to make challenges, MAI investor-state disputes are certain to become a part of doing business.” Despite the threats to national sovereignty that a multilateral agreement on investment would have, at either the OECD or the WTO, the Liberals are right in there pitching. Look for Jean Chretien, Sergio Marchi and others to be champions of free trade and international agree- ments as long as they are in office. Bey will be doing so to repay the multinational corporations that fund their election schemes. LUMBERWORKER/DECEMBER, 1998/5