How Canada coped with flood of imports
Michael J. Knell, Canadian correspondent -- Furniture Today, September 22, 2003
Reading my colleagues' recent reports on the import issue has given me a real sense of déjà vu. It reminds me of the early days following the signing of the Canada-United States Free Trade Agreement in 1989.
At the time, the American dollar was relatively weak vis-à-vis the Canadian greenback, and the tariffs Canada had imposed on U.S. imports soon went away. The result: Canadian furniture retailers could buy U.S.-made product, particularly case goods, comparatively cheaply, and U.S. furniture flooded the Canadian market, decimating our furniture manufacturing industry.
But now, almost 15 years later, Canadian furniture factories have rebounded and are stronger and more focused than ever before. What happened to us then is happening in the United States now.
When three of Canada's leading manufacturers decided to join the antidumping petition in the United States, I had an opportunity to speak with John Bassett, president and chief executive officer of Vaughan-Bassett and a leader in the antidumping effort. Rarely have I encountered anyone with such passion and conviction.
And you know something? Bassett is right. Everything he says about the People's Republic of China is true.
It is a non-market economy where the government can change the rules at will to achieve its desired aims. Its citizens do not enjoy the rights and freedoms we often take for granted here in Canada and the United States. And, in order to achieve price competitiveness in the marketplace, we are exploiting that situation to our own benefit.
But this is a case where being right won't change things much. In the early years of free trade, there were those in the Canadian industry who argued that the way free trade was being implemented would forever damage our industry. Jobs would be lost and communities would suffer. But our government didn't listen to us. The furniture industry was too small. Our collective output was less than that of Bombardier. (It still is.) And Bombardier wanted free trade.
Having lived the experience, it would not surprise me if it repeated itself, this time in Washington. Scanning the news sections of the daily newspapers leads me to believe the U.S. industry's voice really won't be heard. When the Canadian government sought free trade, it was seeking to change this country's economic policy in the hopes of creating greater prosperity. But if I'm reading the newspapers correctly, the current U.S. government isn't particularly focused on economic policy concerns and is concentrating on other things.
I may be wrong, but my impression is that, like us in Canada, our American colleagues can expect little in the way of help from the federal government. But having spoken with John Bassett, I am convinced the American industry will survive. It will adapt. It will change. And if you're looking for a little inspiration, look north. We did it. So can you.
