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Consumer groups in the U.S. applauded a decision by the World Trade Organization (WTO) today to establish a dispute settlement panel to investigate a formal complaint by Canada that the U.S. Department of Commerce's decision imposing countervailing duties of 19.3 percent on softwood lumber imports is illegal.
American Consumers for Affordable Homes (ACAH) spokesperson, Susan Petniunas, said: "The Commerce Department has clearly ignored the significant negative impact of these duties, and related antidumping duties, on consumers, in favor of a handful of U.S. forestry companies. Our legal analysis shows that the actions are illegal, and we are confident that the neutral WTO panel will find the same."
The panel is composed of representatives of three neutral countries and would be expected to return a binding decision as early as six months from now. Canada is expected to also see a panel established to examine Commerce's imposition of 12.6 percent antidumping duties soon. Petniunas said that the action also is illegal, and that the WTO is expected to agree, overturning them.
"These duties amount to an unheard of federally imposed sales tax on American consumers of lumber during a time when our recession economy can not afford more bad news, particularly in the housing sector that must have Canadian softwood lumber," Petniunas added. ACAH is an alliance of 17 consumer associations and companies that oppose any new trade restraint on lumber imports from Canada. Commerce imposed the countervailing duties in August, and they have been applied through Dec. 3.
"Fortunately, the 19.3 percent countervail duties have expired until next May, and cannot be re-imposed until a final determination is made," she added. That reduces the negative impact to 12.3 percent antidumping duties.
Petniunas pointed out that the ultimate victims of the duties are first time homebuyers and seniors who need affordable housing. Economists have said that, based on U.S. Census Bureau calculations, the duties add more than a $1,000 to the cost of a new home and price nearly a half million families out of the housing market since that amount prohibits them from qualifying for a mortgage.
Twelve U.S. Senate and two House leaders recently sent a letter to President George W. Bush and Commerce Secretary Don Evans urging them to overturn the duties that are harming consumers, the housing industry and the overall economy.
In addition, more than 100 Members of Congress have expressed support for free trade in lumber between the U.S. and Canada by sponsoring H. Con. Res. 45 or S. Con. Res. 4.
The trade restraints are actions taken by the Commerce Department based on petitions from a handful of U.S. producers, led by International Paper, Sierra Pacific, Potlatch and Temple Inland, along with southern landholders, who petitioned Commerce to impose the duties when the U.S/Canada Softwood Lumber Agreement expired in April. That agreement put quota restrictions on the amount of lumber imported into the U.S. over a five-year period. ACAH represents approximately 95 percent of softwood lumber use in the U.S.
ACAH represents 95 percent of softwood lumber consumption in the U.S. Its members include American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP USA, Citizens for a Sound Economy, Consumers for World Trade, 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.
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SOURCE American Consumers for Affordable Homes