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U.S. Consumers to Pay as International Trade Commission Vote Opens Door to Impose Huge Duties on Canadian Softwood Lumber

on 5/2/02.

Consumer groups said today's decision by the U.S. International Trade Commission (ITC), which found a "threat of injury" to U.S. forest producers from Canadian softwood lumber imports, is wrong, and cannot be sustained under NAFTA and World Trade Organization (WTO) rules. The ITC decision will allow the U.S. Commerce Department to move forward later in May imposing countervailing and antidumping duties of approximately 27 percent. At the same time, the ITC denied U.S. producer claims that they had been "injured," which would have allowed retroactive imposition of duties.
"It is very sad that a segment of U.S. lumber producers and landowners have been able to get our government to impose such a preposterous level of duties on American consumers," said Susan Petniunas, spokesperson for American Consumers for Affordable Homes (ACAH), an alliance of 18 national organizations and companies which has been fighting the trade action.
"This action is nothing less than a giveaway to U.S. lumber companies, imposed as a sales tax on U.S. consumers by our own government just because the ITC determined something bad might happen in the future," Petniunas added. If the entire 27 percent duties are reflected in U.S. prices, and depending on the lumber market, these duties could add between $1,000 and $1,500 to the cost of a new home, pricing as many as 300,000 to 450,000 families out of the housing market. They would not be able to qualify for mortgages. "While $1,500 may not sound like much to some people, for many first-time homeowners and seniors seeking to lower their housing costs in retirement, it is the difference between being able to buy a home for the first time, or not," she said.
Bobby Rayburn, a homebuilder from Jackson, Miss., and vice president and treasurer of the National Association of Home Builders, said: "Over the past 20 years, independent review panels have evaluated Canada's timber pricing on three separate occasions. In each case in which it was taken to a final decision, it was ultimately determined that the Canadian government did not provide unfair subsidies to its lumber industry.
"We believe that Canada will almost certainly prevail once again in its current cases before NAFTA and the WTO. Hopefully, the U.S. will not attempt to thwart the legal process. Otherwise, the proceedings could drag on for years, and in the meantime, U.S. home buyers and renters will have to pay the price."
Mike Fritz, a lumber dealer from Massachusetts and Board Chair of the National Lumber and building Material Dealers Association, said: "Our nation's annual demand for Canadian spruce pine fir is well-known and well-documented throughout the U.S. consuming industries. The U.S. cannot provide sufficient framing lumber and relies on Canada for approximately one-third of its needs.
"As national demand for affordable housing continues to grow year by year, we further realize the importance of ensuring that a secure, stable supply of Canadian softwood is available for interior framing," Fritz added. "We continue to hope that the handful of U.S. producers seeking to block Canadian product eventually realize the potentially serious damage they may do to the U.S. housing market by continually injecting uncertainty and volatility into the market for Canadian framing lumber. For over twenty years these producers have sought special protection from the U.S. government while other components of the industry devote their time to adapting to the globalization of our marketplace."

Led by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland, and southern land owners forming the Coalition for Fair Lumber Imports filed petitions a year ago alleging that they had been harmed by Canadian softwood lumber imports and asking for countervailing and antidumping duties.
"For the first time ever, a panel of consumers was assembled to testify before the ITC in March. They represented homebuilders, lumber dealers, The Home Depot, manufactured housing firms, and others. Each clearly pointed out that softwood lumber does not compete with southern yellow pine, and that the charges by the U.S. coalition were false," Petniunas said.
More than 100 members of the U.S. House and Senate have signed resolutions or written letters to President George W. Bush over the past year, indicating their support for free trade in lumber, and urging no new taxes or penalties on consumers.
ACAH members include American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP International, 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. Freemont Forest Group Corporation, a lumber distributor, based in Whittier, Cal., today joined the Alliance bringing membership to 18.