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Congressional Resolutions Urge Bush: End 27 Percent Federal Tax On Canadian Lumber Imports Essential for Homes, Other Uses

on 10/16/02.

Congressmen Jim Kolbe (R-AZ) and Steny
H. Hoyer (D-MD) have introduced an updated concurrent resolution calling on
President George W. Bush to pursue discussions with the Canadian Government to
"promote open trade between the United States and Canada on softwood lumber,
free of trade restraints that harm consumers."

The resolution aims to:
ensure a competitive North American market for softwood lumber;

ensure free trade regarding softwood lumber between the U.S. and Canada;

ensure all stakeholders are included in trade discussions of softwood
lumber, a reference that specifically includes consumers who ultimately
pay the increased costs of protectionist tariffs;

and calls for a fair and expeditious review by independent World Trade
Organization (WTO) and North American Free Trade Agreement (NAFTA)

It also urges the U.S. government to abide by the decisions of these
international trade agreements to which the U.S. has subscribed. A similar
resolution has been introduced in the Senate.
The WTO found this summer that the Department of Commerce action imposing
countervailing duties a year ago on Canadian softwood lumber imports should be
overturned, and is in violation of international trade rules. The U.S. has
also recently suffered a major set-back in the WTO when it ruled that the Byrd
Amendment that allows the U.S Government to pay duties it collects to
"injured" U.S. companies in a countervail dispute is also a violation of
international trade rules.
Similar WTO challenges have been made by Canada on the antidumping duties
and other aspects of the long-standing trade dispute between Canada and the
The House resolution, H. Con. Res. 454, similar to one introduced in the
Senate (S. Con. Res. 135) in August and supported by 12 members of the Senate,
asks the Bush Administration not to intervene to impede the current challenges
by Canada in the WTO and North American Free Trade Agreement (NAFTA) to
determine whether the U.S. countervailing and antidumping duties are legal
under international trade rules. The resolutions ask that the process move
expeditiously so that this issue can be resolved under international trade
"Softwood lumber is essential for building quality, affordable homes in
the United States," said Cong. Hoyer. "Its price and availability have a
major impact on the U.S. economy, workers and consumers. The U.S. home
building industry employs approximately 6.5 million people." Hoyer noted that
this compares to more than 25 jobs in the consumption of lumber for each job
in U.S. forestry production.
In May, the U.S. Commerce Department imposed massive countervailing and
antidumping duties, equal to 27 percent of the product's volume, on softwood
lumber. That decision was based solely on the hypothetical "threat of injury"
with no proof of real injury to the U.S. forestry industry by Canadian
The duties are harming U.S. consumers, according to ACAH spokesperson
Susan Petniunas. "The final 27 percent countervail and antidumping duties
imposed last May on finished lumber for framing homes and remodeling, may
increase the average cost of a new home by as much as $1,000," she said.
Based on information from the U.S. Census Bureau, that additional $1,000
prevents as many as 300,000 families from qualifying for home mortgages."
Cong. Kolbe said that the duties "are penalizing home buyers and other
U.S. lumber consumers. It is wrong to penalize consumers when there is no
significant proof that there has been any damage to the U.S. industry by the
Canadian imports. This dispute has been going on for more than 20 years. The
U.S. consumer suffers, while the U.S. government and industry have never been
able to prove that the imports harm our domestic industry."
The duties are opposed by a broad-based alliance of consumer groups, trade
organizations, and companies that represent more than 95 percent of U.S.
softwood lumber consumption, American Consumers for Affordable Homes (ACAH).
"The duties amount to a federally imposed 27 percent sales tax on
first-time homebuyers and on seniors seeking to reduce home costs in
retirement," said Petniunas. "Consumers' interests should be a major factor
considered by the Administration, and we appreciate the members of the House
and Senate urging President Bush to do so," Petniunas said. "These duties
hurt our ability to provide affordable housing, and jobs within lumber
consuming industries."
Because there are not enough trees available to produce framing lumber for
home building in the U.S., Canadian lumber imports are absolutely vital for
the construction of affordable new homes, and to make improvements on existing
homes in America. The U.S. relies on Canada and other sources for
approximately 37 percent of the lumber it needs.
Led by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple
Inland and a group of southern landowners, the Coalition for Fair Lumber
Imports filed petitions with the U.S. Commerce Department more than a year ago
alleging that domestic lumber producers had been harmed by Canadian softwood
lumber imports and asking for countervailing and antidumping duties.
"Since 1981, some of the large U.S. producers and landowners have
periodically charged Canada with subsidizing its lumber industry, and they
have consistently lost when Canada has appealed preliminary decisions,"
Petniunas said. "The summer WTO ruling, that there is no illegal subsidy of
lumber by Canada, continues to show that the U.S. actions are not based on the
facts. We believe the Commerce Department will continue to get failing grades
from on-going WTO and NAFTA reviews of their actions over the past year. The
madness should end, and the administration should sue for free trade in lumber
with Canada."
Similar resolutions were introduced in the U.S. House and Senate last year
and also in the last session of Congress urging free trade on Canadian lumber.
H. Con. Res. 45 and S. Con. Res. 4 garnered more than 110 sponsors earlier in
the session. Members of the U.S. House and Senate also have written letters
to President Bush over the past three years opposing any trade restrictions on
Canadian lumber and indicating their support for free trade in lumber between
the U.S. and Canada.
"It's time for our trade policy to reflect fairness to all of the
stakeholders, including consumers, specifically in discussions about trade in
lumber," said Sen. Don Nickles (R-OK), lead sponsor of the Senate resolution.
American Consumers for Affordable Homes (ACAH) represents more than
95 percent of U.S. softwood consumption. Industries that depend on lumber as
an input and that oppose import restrictions include: manufacturers of
value-added wood products, lumber dealers, manufactured and on-site home
builders, and remodeling contractors. These industries employ more than
6.5 million workers, 25 to one when compared with those in the forestry
ACAH members include: American Homeowners Grassroots Alliance, Catamount
Pellet Fuel Corporation, CHEP International, Citizens for a Sound Economy,
Consumers for World Trade, Fremont Forest Group Corporation, Free Trade Lumber
Council, The Home Depot, International Mass Retail Association, International
Sleep Products Association, Leggett & Platt Inc., Manufactured Housing
Association for Regulatory Reform, Manufactured Housing Institute, National
Association of Home Builders, National Black Chamber of Commerce, National
Lumber and Building Material Dealers Association, National Retail Federation,
and the United States Hispanic Contractors Association.