Taking the issue Due North

By Anil Agarwal
Published: Friday 15 March 1996

The US government has just given The Canadians a well-deserved kick on their pants. It has forced Canada not just to cut subsidies to its domestic lumber industry but also accept effective quotas on lumber shipments to the US. The US argued that the Canadian lumber industry is unfairly subsidised, which has resulted in a steady increase of Canadian lumber in the American domestic market - from a 27 per cent share in 1991 to a record 36 per cent in 1995. As a result, US lumber mills have cut thousands of jobs, and lumber prices have dropped by more than one-third since early 1994.

The Canadian colonisers, who found-vast tracts of forests, have been merrily plundering and pillaging their natural heritage. Different Canadian states have set their own tree-cutting fees and tend to give away their forests at well below market prices - something that we did too with our forests, to feed our paper industry. Now the Canadian provinces have been forced to agree to not just increase tree-cutting fees, but if these still do not sufficiently shrink their lumber exports, they will take back-up measures like export taxes and quotas.

The news gave me a perverse pleasure because it was precisely the same Canadians who had ruined India's massive experiment with farm forests in the mid-'80s. Indian foresters and paper manufacturers had somehow convinced the then Prime Minister, Rajiv Gandhi, that if he permitted reduced customs duties on foreign pulp imports, it would save India's forests. These great visionary entrepreneurs, who are today crying for wood, had then found it cheaper, and hence more expedient, to import pulp from Canada rather than buy wood from Indian farmers and pulp it domestically.

Seeing their market crash - no Indian farmer will grow wood unless it fetches a price equivalent to, or better than, the competing crop - the farmers plucked out millions of plants from their farms. The Canadians had, thus, cook destroyed what was slowly becoming a strategy for internal mobilisation of wood resources and improved environmental regeneration in India.

Undoubtedly, there are problems with India's farm forestry. It was mainly reaching out to big farmers, who were using quality agricultural lands for planting trees like eucalyptus. The ideal solution would have been to develop policies so that poorer farmers, who owned poor-quality lands, could have grown multi-purpose tree species. It was a lesson that India would have slowly learnt, and had, indeed, started learning. In the lateritic tracts of West Bengal, many patta-holders (land deed holders) could not grow anything on their state-gifted lands, which were so poor that the owners largely remained migrant labourers. They suddenly found that they could now grow trees and earn a good price too. Farm forestry was a source for income they had never seen before. But this could not continue unless the wood market existed.

Canadians do not have problems of competing crops, nor of competing uses for their lumber. As long as they can cut the trees cheaply enough, they can hold the market to, ransom. Canadian NGOs have often disparagingly called their country the 'Brazil of the North', which, I personally think, is most unfortunate. Brazil at least has problems of poverty and development associated with its Amazonian crisis, whereas the Canadian forestry pillage is nothing more than just that, and exclusively for cheap wealth.

And strangely, something I have never really understood, it was Canada that fought for a forest convention at the Rio Earth Summit in 1992. Till the end of the conference, everyone was guessing what this convention was all about. Just what is it that the Canadian government then wanted, and still wants, in the UN from, a forest convention remains a mystery - or should I say, conspiracy? Is it trying to push a convention that will protect forests, or its own economic interest in forestry?

But the US-Canada tussle does show how, in a globalised economy, if one country undervalues its environment, it can send massive economic reverberations across the globe. The need for building in ecological costs into internationally traded commodities remains imperative. However, the US government itself is not trying to make any serious point about trade and environment issues in this tussle.. This is election year, and the Clinton administration - despite all its past rhetoric on free trade - is desperately trying to assure its own workers and industry that it cares for them.

The Wall Street Journal recently reported how the American government is trying to subvert Mexican exports by denying Mexican trucks access to US roads. The point being made is that Mexican trucks are unsafe for US roads. The Washington Post recently even carried an advertisement protesting a bill in the Congress which protects Florida tomato growers, who gas the tomatoes to ripen them, from vine-ripened Mexican tomatoes that are imported. This the bill would do by changing the standards in the US law. The Republican-dominated Congress does not care a bit about what this will do to US commitments in NAFTA or WTO.

I guess all this simply teaches us that trade is still an issue that has more to do with politics than rationality. After all, that is exactly what the East India Company had taught US.

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