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Minnesota loggers hoping new NAFTA deal can help sagging industry

VIRGINIA, Minn. — Northern Minnesota loggers said Wednesday that the region's harvest is down significantly, and with about month left in the winter timber season, the clock is ticking.

Industry groups also said that President Donald Trump's notion he will renegotiate the North American Free Trade Agreement (NAFTA) trade deal could result in positive impacts for regional logging companies.

After a tough winter season last year, persistent wet conditions and warmer temperatures are creating hardships across the Northland's industry, resulting in narrowing production timelines and quickly-expiring permit contracts.

"It's terrible, for lack of better words," said Scott Dane, executive director for the Associated Contract Loggers and Truckers of Minnesota. Solutions are few, but that comes with the territory. "Just one of the challenges of making a living in an industry dependent on natural resources and weather."

Loggers typically need a series of days at 10-below zero to establish the frozen ground in the swamps and woods. Without that, companies are blocked from reaching winter stock. On timber lands owned by the state Department of Natural Resources, there's a 30 percent volume reduction compared to December last year, Dane said.

Darwin Rasmusson, owner of Rasmusson Forest Fuels in Virginia, typically calls his winter crew back to work around deer season in October. He made callbacks after Christmas this year, and is eyeing another early March close to the season.

"We lost six to seven weeks of harvest time, there's just no place to go," he said. "It really puts a cramp on your harvest time."

Extending permits is one big step the DNR can take to alleviate the woes, Dane and Rasmusson said, allowing loggers to focus on what they can get to and not push matters to reach a timeline.

Mike Nielsen's logging company in Ely is feeling the same impacts, and he believes the state and U.S. Forest Service can help out by simply planting a more profitable tree. White pine is the tree of choice but has minimal market value.

"Let's grow some trees people want to purchase and there's a consistent market for it," he said.

The Trump effect

Minnesota loggers could feel the impact if NAFTA is renegotiated. Right now, Dane said, it's cheaper for mills to order subsidized timber from Canada and ship it across the border and process it, rather than using wood harvested in Minnesota.

Unlike in the U.S., Canadian lumber companies are subsidized by the government, resulting in below-market values local producers can't compete with. A lawsuit is already in the court system against Canadian timber exports, and the Trump administration could take further steps in an altered trade deal to bring prices level through tariffs.

"It creates a difficult competitive situation for the forest products industry," Dane said. "I think he's looking at all the trade agreements to make them a little more balanced."

Wilbur Ross, Trump's pick for Commerce Secretary, said in his confirmation hearing that he expects the administration to tackle NAFTA early on. Trump already pulled out the Trans-Pacific Partnership, a decision to the benefit of Iron Range mines.

NAFTA was implemented in 1994. It basically eliminated most tariffs on goods traded between Mexico and Canada, and set in place processes to get rid of regulatory (and other) barriers. It is not expected that Trump will pull out of NAFTA because of relations with the two nations, but it is unclear what the president will ask for, and what Mexico and Canada will ask for in terms of concessions.

It also unknown the economic impacts that so-called protectionism will have in the U.S. In Northern Minnesota's logging industry, however, there's a chance to level the playing field.

"It'd be fantastic in some regards," Nielsen said. "It would keep Canadian products on their side or be taxed, and we could thrive more in our country here."

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