Senator PACKWOOD. I have frequently been subject to the criticism that I am a free trader and my bill violates free trade principles. Mr. Chairman, nothing could be more erroneous. My bill is in perfect harmony with existing general agreement on trade and tariff rules, GATT rules. * Article 20G of the GATT allows export limitations, quote: relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption." There is no question, Mr. Chairman, that the export limitations I am suggesting are in perfect harmony with our efforts to conserve all of the timber that we can possibly conserve in this country. As a matter of fact, this committee is actually familiar with this subject. In 1973, this committee reported to the Full Senate a bill that I had introduced which would have banned log exports totally from Federal lands in the West and, in addition, would have se limits on the total amount of logs that could be exported from private lands. It went out of this committee. Last, let me note that there are approximately 10,000 direct jobs lost in the Northwest-direct jobs, Mr. Chairman-because of the export from logs off the Federal and State public lands. In addition, over 30,000 direct jobs are lost because of export off of private lands. As I have indicated, Weyerhaeuser is the principal exporter of private logs, mostly from the State of Washington. While my bill does not in any way limit or prohibit the export of private logs, Weyerhaeuser is still in strong opposition. In conclusion, Mr. Chairman, this committee has a relatively simple decision to make: Does this committee want to reaffirm what it did in 1973 and say that we are going to try to conserve the precious and unique natural resources and, at the same time, save American jobs by prohibiting the export of logs from public lands? Or, is this committee going to say that the creation of jobs overseas is a higher priority than protecting jobs in the United States and, at the same time, preserving a priceless natural heritage that continued exports will devastate and decimate? Last, Mr. Chairman, I want to submit a letter that I received yesterday from Georgia Pacific. One of the groups scheduled to testify in opposition to my bill is the Pacific Rim Trade Association, and they list Georgia Pacific as one of their members. Georgia Pacific does not support their position on this bill, and I did not know that until yesterday. And their letter says very specifically: Georgia Pacific's position on log exports from Federal lands is to codify the existing ban on Federal timber export and on State lands, the State should have the right to determine the buyer of its timber. While we are members of the Pacific Rim Trade Association, the Association understands that our views differ from other members on log export issues. I don't know if there are other members of that Association that are listed as members that share Georgia Pacific's position, but at least Georgia Pacific wants it clearly known that they support my bills. Senator SARBANES. Well, we'll ask the Pacific Rim Trade Association when they testify. Senator PACKWOOD. There is the Georgia Pacific letter for the record. Thank you very much, Mr. Chairman. [The Georgia Pacific letter and the complete prepared statement of Senator Packwood follows:] In response to a discussion earlier today with John Turner of our Washington office regarding Georgia-Pacific's (G-P) membership in the Coalition Against Log Export Restrictions, I believe it would be helpful to clarify the company's position to avoid any misunderstanding. G-P is a member of the Pacific Rim Trade Association (PTRA). The Association has a broad program designed to encourage exports of finished products to overseas markets and we fully support these efforts. However, G-P has made it clear to the PRTA that we do not share the position taken by the Association in support of the Coalition to restrict log exports and prefer that G-P's name not be used when listing members of PRTA on this issue. In fact, G-P does not oppose either of the bills you have introduced on this subject, ie. S. 754, Federal Timber Export Restriction Act, and S. 755, authorizing the states to determine log export restrictions from state lands. G-P's position on log exports from federal lands is to codify the existing ban on federal timber export. In the case of logs harvested from state lands, G-P believes an owner---public or private should have the right to determine the buyer of its timber. Therefore, granting the states the right of self-determination in this regard is a concept supported by our company. We regret any confusion that may have resulted because of G-P's name being listed as a supporter of the Coalition Against Log Export Restrictions. While we are members of the PRTA, the Association understands that our views differ from the other members on the log export issue. I sincerely hope this letter will clarify the G-P position on log exports. Cc: Dewey L. Mobley - Sincerely, Ko thes C. T. Howlett, Jr. Vice President, G-P, Portland, OR. OPENING STATEMENT OF SENATOR PACKWOOD INTRODUCTION Senator PACKWOOD. Mr. Chairman thank you for holding this hearing on S. 754 and S. 755, my package of log exports bills. The future management of our nations forest lands is receiving increasing national attention. The protection and management of our public forestlands has become a national issue. Recently the Senate Agriculture and Energy Committees held a joint hearing discussing the national forest planning process. Congress has to decide how to balance protection of old growth forests with maintaining a sustainable supply of timber for the forest products industry. The export of unprocessed logs is an important component of the timber supply equation. In 1988 alone 4.6 billion board feet of softwood logs were exported from the United States, enough logs to build over 400,000 homes, and of that log export total, 20 percent came from public lands in the Western States. S. 754 and S. 755 would restrict the export of unprocessed logs from State and Federal lands. These bills will enable both the States and the Federal Government to develop cohesive and consistent policies governing the export of logs from Federal and State lands. My first bill, S. 754, establishes a permanent ban on the export of unprocessed logs from Federal timberlands. The second bill, S. 755, delegates congressional authority to States allowing them to regulate the export of logs from State-owned lands. The bills are primarily aimed at conserving an exhaustible natural resource in increasing short supply. Although trees are a renewable resource, old growth forests are not. A coalition of diverse groups including national environmental organizations, timber associations, and labor unions supports legislation limiting log exports. I am pleased to see the Governor of Oregon is here to lend his support to this initiative. HISTORY OF INVOLVEMENT My concern about the effect of exporting logs on the economy of Oregon and the forest products industry is longstanding. In fact, in 1973, when I was a member of the Banking Committee, I held hearings in Portland on log export restrictions. I also sponsored legislation that year banning log exports from Federal lands and phasing out log exports from private lands over three years. The committee reported out an amended version of the bill on May 16, 1973. In February of this year I held hearings throughout Oregon on whether or not we should restrict log exports. Many of the more than 30 witnesses who testified were the same individuals who testified at my 1973 hearing. The dynamics of the issue have changed but the players have not. Representatives of Federal, State, and local governments as well as timber companies and environmental organizations stated loud and clear that they are increasingly concerned about the exportation of unprocessed logs and want action to restrict public log exports. The economy of Oregon and the Pacific Northwest depends on a vibrant and productive forest products industry. Mills are closing because they do not have enough logs to process, while at the same time, there is record demand for timber products. The export of unprocessed logs contributes to the imbalance in the log supply equation. In 1988 alone, the Columbia River/Snake River Customs District exported an estimated 1.4 billion board feet of private and state logs to overseas markets. An estimated 100 to 125 million board feet of logs harvested from Oregon State owned lands were exported, an amount equal to almost half of the timber harvest in the Chairman's State of Maryland. This is only about 1.5 percent of Oregon's total timber harvest (public and private) but in this era of short supply these logs could be providing new jobs for millworkers. I believe, therefore, it is time for Congress to explicitly delegate to States the authority to regulate log exports from Stateowned lands. This would enable the States and the Federal Government to have consistent log export policies. FEDERAL LOG EXPORT BILL Mr. Chairman, S. 754, would make permanent the current temporary prohibition on exporting logs from Federal lands west of the 100th meridian (a line running from central North Dakota through central Texas) in the continental United States. This bill excludes lands held in trust by the United States for Indians. Current law with respect to Indian lands allowing log exports is unchanged. Since 1973, a ban on Federal logs has been included in the Interior appropriations bill, replacing the Morse amendment. I think it is time that this ban which we have successfully fought for every year, become permanent law. Earlier this year the administration's budget proposal recommended lifting the ban on Federal log exports. After further review, I am pleased to report that the administration has decided to drop their opposition to the Federal ban. In their letter to Senator Hatfield and me they recognized that "lifting the ban could have an adverse effect on the environment." SUBSTITUTION My Federal log export bill also eliminates the loopholes in current law permitting log substitution. Substitution is used by companies to replace private logs exported with Federal logs. Federal regulations prohibit companies from using Federal logs in their mill operations to replace the private logs exported. The regulations do allow some companies that purchased Federal timber and exported private timber between 1971-1973 to continue this practice at the historic levels. These historic quotas are no longer necessary because there has been ample time for these exporters to adapt to the market. My legislation would phase out the historic quotas over the life of existing Federal timber sales contracts. These companies should not be be provided an unfair advantage over other timber companies. I understand that in some cases when these companies have gone out of business, they have transferred this benefit to new companies. This anticompetitive practice is injurious to the nation's forest products industry and should be phased-out. THIRD-PARTY SUBSTITUTION The practice of third party substitution would be eliminated in S. 754. Federal regulations allow log export companies that are re |