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New Senate Bi-Partisan Resolution Urges President Bush To Promote Open Lumber Trade Between U.S. and Canada

on 8/2/02.

- Introduction comes on the heels of WTO finding that the Commerce
Department improperly ruled that Canadian lumber is subsidized
- Consumer Representatives Applaud Senate action; Duties keep more than
300,000 U.S. families from home ownership
- 27 Percent Duties Imposed in May by U.S. Government on Canadian Lumber
are 'Federally imposed sales-tax on consumers, homebuyers'
WASHINGTON, Aug. 2 /PRNewswire/ -- A bi-partisan resolution (Sen. Con. Res. 135) introduced in the U. S. Senate late yesterday (Thursday) by Senators Don Nickles (R-OK), Jon Kyl (R-AZ), Pat Roberts (R-KS), James Inhofe (R-OK), Jim Bunning (R-KY), Bob Graham (D-FL), Evan Bayh (D-IN), Chuck Hagel (R-NE), Jean Carnahan (D-MO) urges President 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 World Trade Organization (WTO) found on July 26 that the Department of Commerce action imposing preliminary countervailing duties a year ago on Canadian softwood lumber imports should be overturned, and is in violation of WTO's rules. That announcement is expected to be officially made next month and could be followed by three months of appeals.
A similar WTO challenge has been made by Canada on the preliminary antidumping duties and is expected to be known in August. Today's resolution asks the 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 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 more than $1,000," she said. Based on information from the U.S. Census Bureau, that additional $1,000 prevents more than 300,000 families from qualifying for home mortgages."
The U.S. Department of Commerce imposed the duties in May after the International Trade Commission (ITC) found that there was a potential for a "threat" to U.S. lumber producers from Canadian lumber imports. The ITC also concluded, however, that there was no evidence that Canadian lumber imports had harmed the U.S. industry at that time. The duties have been 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," said Petniunas. "Consumers' interests should be a major factor considered by the Administration, and we appreciate the Senators 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 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 1983, 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 July 26 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."
Similar resolutions were introduced last year and the year before urging free trade on Canadian lumber. H. Con. Res. 45 and S. Con. Res. 4 garnered more than 110 sponsors. 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, in discussions about trade in lumber," said Sen. Nickles.
ACAH members include American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP International, Citizens for a Sound Economy, Consumers for World Trade, Freemont 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.
Text of Sen. Con. Res. 135 follows:
Initial Sponsors: Senators Don Nickles (R-OK), Jon Kyl (R-AZ), Pat Roberts (R-KS), James Inhofe (R-OK), Jim Bunning (R-KY), Bob Graham (D-FL), Evan Bayh (D-IN), Chuck Hagel (R-NE), Jean Carnahan (D-MO)
Expressing the sense of the Congress regarding housing affordability and urging fair and expeditious review by international trade tribunals to ensure a competitive North American market for softwood lumber.
Whereas the United States and Canada have, since 1989, worked to eliminate tariff and nontariff barriers to trade;
Whereas free trade has greatly benefited the United States and Canadian economies;
Whereas the U.S. International Trade Commission only found the potential for a Threat of Injury (as opposed to actual injury) to domestic lumber producers but the Department of Commerce imposed a 27% duty on U.S. lumber consumers;
Whereas trade restrictions on Canadian lumber exported to the U.S. market have been an exception to the general rule of bilateral free trade;
Whereas the legitimate interests of consumers are often overlooked in trade disputes;
Whereas the availability of affordable housing is important to American home buyers and the need for the availability of such housing, particularly in metropolitan cities across America, is growing faster than it can be met;
Whereas imposition of special duties on U.S. consumers of softwood lumber, essential for construction of on-site and manufactured homes, jeopardizes housing affordability, and
Whereas the United States has agreed to abide by dispute settlement procedures in the world trade organization and the North American Free Trade Agreement, providing for international review of national remedy actions; and,
Whereas the World Trade Organization and North American Free Trade Agreement dispute panels are reviewing findings by the ITC: Now, therefore, be it
Resolved by the U.S. Senate (the House of Representatives concurring), that it is the sense of the Congress that --
1) The Department of Commerce and U.S. Trade Representative should work
to assure that no delays occur in resolving the current disputes
before the NAFTA and WTO panels, supporting a fair and expeditious
2) U.S. anti-dumping and countervail law is a rules-based system that
should proceed to conclusion in WTO and NAFTA trade panels;
3) The President should continue discussions with the Government of
Canada to promote open trade between the United States and Canada on
softwood lumber free of trade restraints that harm consumers;
4) The President should consult with all stakeholders, including
consumers of lumber products in future discussions regarding any terms
of trade in softwood lumber between the United States and Canada.