hole-written and as poorly enforced as it is should be greatly enhanced. Thank you, Mr. Chairman. [The complete prepared statement of Representative DeFazio follows:] STATEMENT OF THE HONORABLE PETER DEFAZIO U.S. House of Representatives before the Subcommittee on International Finance and Monetary Policy of the Committee on Banking, Housing, and Urban Affairs November 7, 1989 Mr. Chairman and members of the committee: First, I'd like to thank you for holding this hearing and giving me the opportunity to testify. The Pacific Northwest, and particularly Oregon's Fourth Congressional District which I represent, is facing a potential economic crisis. The crisis is the result of a growing shortage of timber for the region's wood processing industry. We're not crying wolf. The question before this committee today is whether the Congress of the United States will stand idly by while a significant portion of the U.S. lumber and wood products industry sinks into decline, or whether we'll act in a manner consistent with our status as an industrialized nation. - another way are we going to allow the western United Put My colleague from Oregon, Senator Packwood, asked the Commerce Department to look at Japanese wood products trading practices. Their report, dated April 1989, found that Japan systematically excludes our finished wood products from its markets, while encouraging the import of raw logs. The U.S. Trade Representative agrees. Japan's trade barriers to our finished wood products have been identified as a priority practice under the so-called "super 301" provisions of the new trade bill. The coalition that has grown up around the issue of log exports supports the maxim that "Politics makes strange bedfellows." Most of the timber industry in the Pacific Northwest supports further restrictions on the export of unprocessed logs. Organized labor is tired of standing on the docks and waving "Goodbye" to its logs and its jobs. Every major national environmental group in the nation is with us. And last summer, citizens in Oregon voted nine-to-one in favor of a ban on the export of logs from state lands. Today you'll hear a litany of alarming statistics about the state of the timber economy in the Northwest. They are not overstated. Many communities in southwest Oregon depend almost entirely on one independent mill as their primary employer. Those mills depend in large part on a supply of timber from public lands. And that timber is increasingly scarce and expensive, due in part to the intense demands of the export market. Log exports are only a part of the problem, but a big part. In 1988, one in four logs harvested in Oregon and Washington were exported unprocessed, compared to only two percent of the total harvest in 1962. Preliminary data for 1989 show no slowdown in the flood of raw logs from our ports. It doesn't take a degree in economics to figure out that when we export logs, we export jobs. By one estimate, there are 3.5 jobs lost for for every one million board feet of logs that are exported. If you accept that estimate, then we exported almost 13,000 timber industry jobs from Oregon and Washington in 1988. Even the Bush Administration admits that log exports lead to job losses. The Office of Management and Budget estimated that nearly 12,000 timber industry jobs would have been lost over three years had President Reagan's proposal to lift the federal ban gone into effect. I'd like to address two significant aspects of the log export problem today: Exports from state owned or administered lands, and the huge loopholes in the ban on federal log exports known collectively as "substitution." STATE LOG EXPORTS Senator Packwood and I have introduced legislation to allow the states to regulate the export of logs from their own lands (H.R. 1191 and S. 755). No one really knows what percentage of timber harvested on state lands is being exported. Total harvests on state lands in Oregon and Washington in 1987 amounted to nearly 1.2 billion board feet. In Washington, it is estimated that two-thirds of the nearly one billion board foot state harvest was exported unprocessed. Oregon's State Forester estimates that 43 percent of the 230 million board feet harvested from State of Oregon lands was exported. He admits that his estimate is essentially a guess. Some analysts estimate that 75 percent of the state harvest is going for export. Whether it's 43, 75, or 100 percent, it's important to note that the impact of those exports is concentrated in only areas that traditionally depended on that a few areas - timber for their independent mills. For instance, mills in Coos and Douglas Counties in my district traditionally purchased the timber harvested from the Elliot State Forest. But those mills can no longer pay the prices being bid by the exporters. Even the State Forester admits that at least 80 percent of the timber from the Elliot State Forest is being exported. That hurts. Senator Packwood and I are only asking that each state be allowed to adopt policies that are consistent with longstanding federal policy. Private landowners can choose whether to sell their logs into export, or mill them at home. The federal government has wisely chosen to ban the export of its logs though, as we'll see, the ban is full of holes. But states have no choice they've got to sell their trees to an exporter. - Oregon In Oregon, we've invested heavily in our State Forests. The Tillamook Forest is a prime example. After fires in the 1930s and 40s devastated 240,000 acres of forestland destroying 13 billion board feet of prime timber voters approved a bond measure to rehabilitate the forest. School children, conservation groups, Boy Scouts and Girl Scouts, and thousands of other Oregonians joined to help replant the burned areas. Mr. Chairman, it would be a crying shame if the trees in the Tillamook Forest now nearing maturity were harvested and exported to feed a highly protected and inefficient Japanese milling industry. I hope the committee will support S. 755 and allow the people of Oregon to enjoy the fruits of their investment. |