consequences of the reduction must be proportional to all of the members of the forest products industry. To try to cushion the impact on one sector by restricting log exports would injure not only ILWU members, other workers who depend on log exports and their communities, but the forest products industry at large. Thank you again for giving us this opportunity to present our views. Senator SARBANES. Thank you very much for your testimony. STATEMENT OF WAYNE PIERCE, GENERAL TREASURER AND DIRECTOR OF LEGISLATION, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, WASHINGTON, DC Mr. PIERCE. Thank you, Mr. Chairman. My name is Wayne Pierce and I serve as General Treasurer and Legislative Director for the United Brotherhood of Carpenters and Joiners of America. And I want to thank you for inviting us to testify today. I have with me a couple of our in-house experts, Mr. Dennie Scott, and Alan Hal, in case there are any technical questions you would like to ask later. Mr. Chairman, our Brotherhood is a trade union with 600,000 members in the United States and Canada. Our members are employed in construction, installation of heavy machinery, mill rights, ship building, furniture, cabinet, mill work, logging, lumber, plywood and other wood manufacturing jobs. We have over 40,000 members in Washington and Oregon. Our union strongly supports S. 754 and S. 755, and we ask that members of this subcommittee approve both measures. The log export issue is a simple one, despite efforts by some to make it appear highly technical and complex. It boils down to a point of principle concerning a choice about how we are going to manage timber resources owned by the public. Do we want our public lands to be tree farms to supply foreign countries with raw materials? Or, do we wish to promote more value-added manufacturing to achieve the numerous benefits that that approach creates for this country. Our union feels that for elected officials charged with determining public policy, the answer is clear and obvious. The first priority of timber resources grown and harvested from public lands should be to provide maximum benefit to the broadest group of U.S. citizens possible rather than to Asian manufacturers. Softwood log export volumes from the Pacific Northwest have been at extremely high levels for many years. As measured from U.S. Custom Districts in Oregon and Washington, log exports from public and private lands have been above 2 billion board feet in 9 of the last 10 years. Log exports grew to 3.68 billion board feet in 1988, and projections indicate 1989 volumes will go even higher. To put these numbers in better perspective, over the last 5 years, log exports have averaged out at about 21 percent of the total timber harvest from Washington and Oregon. Senate bill 754 is needed in order to place a law on the books making the prohibitions against exporting unprocessed federal timber permanent. This is a superior approach to the one now utilized, which depends on a rider to the Appropriations Bill each year. Our union supports the strengthening of S. 755 with directives to the administering agencies to eliminate the substitution of Federal timber for logs exported from private corporate lands. For example, the current rules do allow substitutions for volumes up to and slightly above what's called historical levels. There is no justification for allowing substitution based on historical levels. Operators should be denied Federal timber sales if they elect to export any of their privately-owned timber. Current regulations do not prohibit the primary purchaser from transferring Federal timber to a third party, who in turn may export the logs. We applaud Senator Packwood's efforts to address this problem with the language obligating the purchaser to secure written guarantees from subsequent third party purchasers indicating they will comply with the log export prohibitions. The Pacific Northwest is entering a critical period of timber supply decline. Numerous studies-Beuter, United States Forest Service, Wideman document the trend. One major reason for the projected downfall of timber harvests during the next 30-40 years is the heavy cutting that occurred on industrial corporate forest lands. It is our view that much of this fast harvest was stimulated by the lucrative log export market over the last 25 years. One study serves to illustrate the magnitude of the projected downfall problem. Between 1988 and 2020, this study projects that harvests from the U.S. Pacific Coast region will fall by 17 percent. This fact has not been lost on the largest forest products corporations. Several magazines have reported that Georgia Pacific and Weyerhaeuser are negotiating presently with the Soviet Union to log that country's forests in exchange for setting up saw mills. The articles point out that this overture was promoted because of the timber supply crisis in the United States Weyerhaeuser has been the largest corporate log exporter over the last 25 years. It looks like two companies that probably made a considerable contribution to the timber supply downfall are attempting to fill the gap with wood products imported from the Soviet Union. It is of particular interest that the Soviet deal, if concluded, will result in lumber shipments to the United States, not raw logs. As a consequence of shrinking supply, the forest products industry will be going through an extremely difficult transition. Much of the change will resemble turmoil as intense battles break out over the best use for a diminished supply. Indeed, the pressures have already caused bid prices for public timber sales to climb at a radical rate. Our written testimony documents these facts. Log exports make the timber supply crunch worse, especially during this period. It is necessary to view log exports as a way to mitigate the disruptions that will be caused by declining timber harvest over the next two decades. Purchasing down log export is also part of a broader strategy to make the highest and best use of our public timber base while striving for more manufacture of end use wood products. Public policy should help to speed the trend toward more valueadded manufacturing, so the negative disruption and dislocations can be partially avoided. The employment base for the Pacific Northwest forest products industry has been declining since the late 1970s. Mr. Chairman, we ask you to help us keep the jobs for American workers. We have submitted the numbers of jobs lost each year in Washington and Oregon over 10 years. Forty-nine thousand from 1977 to 1987. The rather consistent, long-term trend downward is explained by several factors: increased automation, conversion to second growth timber, and the failure to curtail the volume of log exports. For the record, we have noted the increase in lumber production while employment has declined. Another way to examine employment trends is to calculate the number of direct force industry jobs created from annual timber harvests. Total timber harvested in Oregon and Washington during the comparable peak demand years of 1978 and 1987 was 14.748 million board feet; and 15.252 million respectively. In 1978, this volume created one job for every 92,700 board feet of harvest. By 1987, just 9 years later, it took 114,700 board feet of harvested timber, a 27 percent increase, to generate one fulltime job in the wood products and paper industry. This means that due to, one, technological change; two, transition to second growth timber; and, three, the failure to maximize value-added manufacturing opportunities, the region achieves a lower job creation benefit for each thousand board feet of timber harvested than was the case several years ago. Another study by Flor and McGinnis for the Pacific Northwest Research Station of the Forest Service concludes that if log export restrictions were imposed on timber harvested from Oregon State lands, the State would achieve a net gain of at least 700 jobs in that the timber harvest in Oregon from State lands is only about one-fifth the volume harvested from Washington State lands. The expectations would be that a net gain of about 3,500 jobs could be achieved in Washington if a domestic processing rule were adopted there. And I submit that it's probably even higher than that. That is why it is also important to pass S. 755; the debate on how States should manage timber lands under their respective jurisdictions should be carried out at the State level. The bottom line cannot always be how much profit is available for a single corporation or big business. It is more important to consider how many U.S. workers are employed or could potentially be employed. We should concern ourselves with producing more high-paying quality jobs for American workers, much like the Japanese do. After all, the Federal lands where timber is grown belongs to the people of our great country. Then shouldn't those lands be providing jobs for Americans rather than for workers in other countries? And I want to thank you, Mr. Chairman, for allowing our Union to testify today. [The complete prepared statement of Wayne Pierce follows:] STATEMENT OF THE UNITED BROTHERHOOD OF CARPENTERS My name is Wayne Pierce and I serve as General Treasurer and Director of Legislation for the United Brotherhood of Carpenters and Joiners of America at 101 Constitution Ave., N. W., Washington, D. C. 20001. The United Brotherhood of Carpenters is a trade union with 600,000 members in the U. S. and Canada. Our members are employed in construction, installation of heavy machinery (millwrights), shipbuilding, furniture, cabinet/millwork, logging, lumber, plywood and other wood manufacturing. Our union supports S.754 and S.755 and we ask that members of this subcommittee approve both measures. The log export issue is a simple one, despite efforts by some to make it appear highly technical and complex. It boils down to a point of principle concerning a choice about how we are going to manage timber resources owned by the public. * Do we want our public lands to be tree farms to supply foreign countries with raw materials or do we wish to promote more valueadded manufacture to achieve the numerous benefits that that approach creates for this country? * Do we want to export unprocessed public timber, grown with public investment, to provide income and jobs for Far Eastern manufacturers or do we want to expand income and job opportunities for workers and communities in the U. S.? * Do we want to manage our public forests for the long-term interests of U. S. citizens, or simply for the short-term profit objectives of log exporters? Our union feels that, for elected officials charged with determining public policy, the answer is clear and obvious. The first priority of timber resources grown and harvested from public lands should be to provide maximum benefit to the broadest group of U. S. citizens possible, rather than to Asian manufacturers. Softwood log export volumes from the Pacific Northwest have been at extremely high levels for many years. As measured from U. S. Customs Districts in Oregon and Washington, log exports from public and private lands have been above 2 billion board feet in nine of the last ten years. Log exports grew to 3.68 billion board feet in 1988 and projections indicate 1989 volumes will go even higher. To put these numbers in better perspective, log exports, over the last five years, have averaged out at about 21 percent of the total timber |