Maine sawmills and timber harvesters could benefit if President-elect Donald Trump goes through with a draft plan to aggressively renegotiate trade terms for competing softwood lumber imported from Canada.

A Trump transition team memo obtained by CNN last month calls for the United States to renegotiate or withdraw entirely from the North American Free Trade Agreement, which fosters trade with Canada and Mexico.

The memo has raised fears in Canada that hefty U.S. duties may be slapped on Canadian timber exports early next year, hammering an industry that exports 70 percent of its production to the United States. The lumber – boards, beams, planks, and framing made from spruce, fir, pine and other softwood trees – is primarily used in home and building construction, and could become more costly for U.S. consumers if duties were imposed.

However, while retail lumber prices might rise, Maine’s lumber industry could flourish.

U.S. lumber interests have alleged that Canadian firms have an unfair advantage because they cut most of the wood in provincial public forests, where they allegedly pay below market prices. They say the practice adversely affects sawmills and wood products makers that support the employment of 11,000 Mainers.

“If we have a level playing field where subsidies don’t exist or are neutralized through a (tariff) agreement, we feel there will be opportunities to expand production in Maine and the U.S.,” says Jason Brochu, co-president of Pleasant River Lumber, which employs 300 at sawmills in Dover-Foxcroft, Jackman, Hancock and Sanford. “We think there shouldn’t be any situation where for reasons that are beyond regular market forces that anybody is able to ship more.”

Brochu’s uncle, former Pleasant River president Luke Brochu, was a prior head of the U.S. Lumber Coalition, a Washington, D.C.-based group that has long fought for federal action against Canadian lumber. The coalition has petitioned the U.S. Department of Commerce and the U.S. International Trade Commission to investigate Canadian practices and impose duties to offset the alleged harm to U.S. mills.

“We’re proceeding as we were before on our trade case and are working with the current administration on possible trade agreements,” says the coalition’s executive director, Zoltan van Heyningen. “The Trump team is still getting all their agencies together, and we don’t know who is going to be heading the various ones that are relevant to us, so it’s too early to have a whole lot to say.”

STAKES HIGH FOR BOTH COUNTRIES

Lloyd Irland, a forest products and timber consultant in Wayne, says the impacts of Trump’s trade policies on Maine would depend on which specific measures were adopted but that in most scenarios Maine interests would likely gain. “This will affect the overall national market, primarily through price,” he says. “It’s possible that they will be able to keep higher prices in the U.S. market with some scheme to restrict Canadian lumber imports and that will be good for our mills and landowners.”

A logging truck heads north on Route 11 in St. John Valley just north of Eagle Lake in 2012. Maine sawmills employed 1,996 people last year, down from 2,365 in 2001, according to state labor statistics.

A logging truck heads north on Route 11 in St. John Valley just north of Eagle Lake in 2012. Maine sawmills employed 1,996 people last year, down from 2,365 in 2001, according to state labor statistics. Press Herald File Photo/Shawn Patrick Ouellette Press Herald File Photo/Shawn Patrick Ouellette

Prices would likely go up for consumers, a point the premier of British Columbia, Christy Clark, has emphasized. “One of the things we know is that if Canadian softwood doesn’t come into the United States, the price of housing goes way through the roof,” Clark told reporters in Ottawa on Nov. 18. “So if (Trump) is a president that decides that he wants to keep housing affordability within the reach of average Americans, if he wants to keep job growth going – because residential construction is a big part of that in the U.S. economy – then I think we will have an easier path on softwood than we might have otherwise.”

A spokeswoman at the Canadian consulate in Boston says both countries have an interest in reaching a negotiated agreement on the issue and that Canada is committed to free trade. “The Government of Canada will vigorously defend the interests of the Canadian softwood lumber industry including through litigation at the (World Trade Organization) and either under NAFTA or in U.S. courts, as appropriate,” Lisa Carrier said by email, adding that over the past 30 years, four U.S. investigations into timber pricing on Canadian provincial lands had failed to survive legal challenge.

The softwood trade dispute has been simmering on and off for decades and is one of the most contentious between the largest trading partners in the world. A 1996 agreement that established quotas and tariffs on Canadian imports expired in October 2015, allowing Canada to export lumber tariff-free for one year while the parties negotiated. When they failed to come to a new agreement Oct. 12, interests such as the U.S. Lumber Coalition were free to file fresh trade grievances.

Maine sawmills employed 1,996 people last year, down from 2,365 in 2001, according to state labor statistics. The state’s lumber and solid wood products sector – which includes plywood and furniture – has an annual output of $1.1 billion and supports over 11,000 jobs, according to the Forest Products Council of Maine. Harvesting operations – which cut trees bound for paper mills, wood pellet makers, and firewood dealers as well as the lumber trade – employ another 2,200.

EXTENSIVE CROSS-BORDER OWNERSHIP

Not all Maine landowners will be winners if moving lumber across the Canadian border becomes more difficult and expensive. Many woodlots in the sprawling industrial forests of northwestern Aroostook County are isolated from Maine sawmills, so their owners truck timber to sawmills built just over the Quebec border that specifically cater to their needs. Some people own mills on both sides of the border, using them as a hedge against changing trade rules and fluctuations in the relative value of the U.S. and Canadian dollars.

Irland says Maine is also unusual because of extensive cross-ownership of sawmills and land, which makes many communities here dependent on Canadian investments. J.D. Irving, the New Brunswick-based forest products behemoth, is the state’s largest landowner and recently built a $30 million sawmill in Ashland.

The Forest Products Council of Maine, which represents a wide range of interests from truckers to paper mills, doesn’t take a position on the trade dispute. “We’re hopeful we can find a solution that helps all members of the Council,” says executive director Patrick Strauch. “And that has to take into account the various perspectives that are unique to Maine.”

Irland expects the Trump administration will probably take action on the issue. “There’s no question that from both sides of the political spectrum – Sanders and Trump – there’s been promises to save jobs through protectionism, so there’s pretty strong public support for that,” he says. “This would be a politically low-cost way to be seen to be doing something.”