Global economics swing the West

  Dear HCN,


Your article, "A timber town rallies for roads' (HCN, 7/6/98), notes that protesters in Cascade, Idaho, say the proposed moratorium - which would place a temporary end to road-building in roadless public forests in the Interior West - would put the squeeze on local timber supplies and lead to mill closures.


On July 13, the Idaho Statesman reported that local timber companies, citing the road moratorium, warned of impending layoffs. A Boise Cascade spokesperson said the road moratorium would reduce access to federal timber. The next day the same paper reported that Boise Cascade was shutting down four regional mills.


Was closing the mills good for business? An investment researcher was quoted as saying, "It (the mill closures) will have a long-term positive effect on the company's bottom line." The announcement comes at a time when two of the last three timber sales put up for auction on the Boise National Forest went without bidders.


A Wall Street Journal article reported that U.S. lumber prices have declined by 21 percent since last April "when a Japanese consumption-tax increase touched off a collapse in Japanese housing starts and sent lumber prices tumbling." (-Lumber-Price Rally May Hinge on Japan," 2/17/98). And Bloomberg News Service reported that "Lumber (prices) for July delivery fell to a two-and-one-half-year low on Monday on the Chicago Mercantile Exchange because weak demand in Asia has created a worldwide oversupply of wood." (-Lumber prices fall as output increases," HCN, 6/8/98.)


The planned Idaho state Reservoir timber sale on the South Fork of the Salmon River was recently dropped due to low lumber prices. Reduced lumber prices curtail incentives to buy federal and state timber, even when it's offered at below cost. So much for a local timber "shortage."


The Boise-based (and Delaware incorporated) Boise Cascade Corporation is finishing operations in Mexico (they got some of what they wanted and social tensions are rising) and is now starting up operations in Brazil and Chile. By late 1997, the company's panel plant in Barwick, Ontario, had gone on line. Is Russia its next frontier? (-Boise Cascade prospects in Russia for green gold of Siberian forests," Idaho Business Review, 1/1/96).


Boise Cascade is not unlike any other timber transnational corporation. Closing local mills hinges as much or more on its foreign ventures as it does on local supply.


While the road moratorium is more than welcome, at least in the Interior West, conservationists - just like the folks in the town of Cascade - must be reminded that what happens locally is as likely to be shaped by what happens in the global economy as it is by policy shifts emanating out of Washington, D.C. Unfortunately, some of us conservationists are overly attentive to policy formation or, worse yet, a dreamy-eyed notion of a self-regulating "free market" to note that "It's the economy, stupid," and a global one at that.





Don Smith


Boise, Idaho





An article, "The Critical Need for Law Reform to Regulate the Abusive Practices of Transnational Corporations: The Illustrative Case of Boise Cascade Corporation in Mexico's Costa Grande and Elsewhere," by William A. Wines and Mark A. Buchanan of Boise State University and Donald J. Smith, has just been published in the Denver Journal of International Law and Policy of the University of Denver College of Law. To obtain the journal call 303/871-6166.