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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (12203)	11/30/2001 11:54:13 PM
From: Doug Soon	Read Replies (1) \| Respond to of 281500

Hawk, Will you stop already with dissing the Brits. Some of my best friends are Brits. >the Canadian government is drastically subsidizing their timber industry We have already discussed and dealt with this topic. I gather you have no new points to make. In the final analysis, the politicians will decide. I hope all recognize the value of being good neighbors to each other. Yes, I mean both ways. Canada has and will continue to be a good neighbor. I'm just not convinced that it is necessary to test it once in a while.

To: Hawkmoon who wrote (12203)	12/1/2001 12:26:29 AM
From: Bilow	Read Replies (1) \| Respond to of 281500

Hi Hawkmoon; Re: "If Canadians could provide sufficient evidence that the stumppage fees they pay to Ottawa fully cover the replacement and management costs of replanting their forests, I might be more inclined to accept the Canadian position." Having made these sorts of calculations, I can assure you that the result would be pitifully small stumpage fees. The vast majority of the cost of timber is a function of the NPV of the land required to grow it, at least in the US. In the US, the cost of planting a tree is well under 5 cents per tree. Twenty years later, perhaps 1/20 of them will be left, (depending on what got taken for pulp &c.). That's a cost of $1 per tree, plus interest. But even with interest it's negligible. Instead, most of the cost of wood is in the land and time. The Canadians don't seem to have a free market in land, but they ought to be able to figure it out. Just guessing, I'd say their land is considerably cheaper than ours. In addition to the land costs, you have to take into account the interest rate. I'm supposing their interest rates are higher. If so, I think this would have the effect of increasing their stumpage costs. The interest effect would be different depending on the age of the trees under consideration, but would be heaviest for the oldest trees. The land cost would be equal for young and old trees in effect. If prodded, I could dig up my text book on the economics of silviculture where this sort of thing is discussed at length. But it's obvious to me that having the public at large (or politicians playing to the Sierra Club) decide this issue isn't a real good idea. On the other hand, stumpage fees are so dependant on interest that it almost makes the whole calculation unstable. In addition, you have issues of "real" interest because of inflation corrections. -- Carl

To: Hawkmoon who wrote (12203)	12/1/2001 1:32:33 AM
From: teevee	Read Replies (2) \| Respond to of 281500

Hawk, Well Doug... I'm not a "free trader". I'm a "fair trader". And when it's seemingly apparent that the Canadian government is drastically subsidizing their timber industry by undercharging for a national resource that is owned by Canadian taxpayers, I get the sense that we're not talking about "fair trade". We're I a "free trader" then I would think it to be perfectly alright to import foreign goods produced in sweatshops or with child labor (not saying this is the case in Canada). Because the argument would be the same.. Namely that the US should accept the labor "mechanism" that permit foreign companies to use such cheap labor to lower their costs and compete for US market share. But I also believe that those who make use of renewable national resources should pay for their replacement and/or management by the government. If Canadians could provide sufficient evidence that the stumppage fees they pay to Ottawa fully cover the replacement and management costs of replanting their forests, I might be more inclined to accept the Canadian position. Thats an interesting point of view. American oil and gas companies have to pay one heck of a lot of money in auctions to secure the mineral rights to Government lands, in the Gulf of Mexico for example. Then to increase the disadvantage, they have to deal with the high cost of off shore drilling. I am surprised that you don't argue for tariffs on cheap Saudi crude oil being dumped in the USA. Don't American oil producers need to be protected too? If American consumers can pay more for poor quality yellow pine from Georgia, why can't they pay more for domestic oil too?