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U.S. Efforts to Restart Discussions on Canadian Softwood Lumber Trade Welcomed by Consumers Who Remain Opposed to Any Co…

on 1/8/03.

Representatives of U.S. consumer
interests welcomed efforts by the Commerce Department announced yesterday to
seek a long-term solution to the prolonged and complex dispute with Canada
over softwood lumber imports. American Consumers for Affordable Homes (ACAH),
an alliance of 18 large national organizations and companies representing more
than 95 percent of U.S. lumber consumption, said however that it remains
opposed to imposing any border measures -- import or export taxes or quotas --
that only end up harming consumers.
The Commerce Department imposed 27 percent countervailing and antidumping
duties on lumber imports last summer, duties that consumers consider a
federally imposed sales tax on lumber that harms homebuyers and impacts
housing affordability in the U.S.
The duties were imposed at the urging of a few large U.S. producers, led
by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland,
and southern land owners forming the Coalition for Fair Lumber Imports,
alleging that they had been harmed by Canadian softwood lumber, based on a
perceived threat to the industry, although no evidence of actual injury was
"The new Commerce Department initiative, in the form of policy bulletins
dictating forest practice changes the U.S. wants Canada to make, is certainly
welcomed to restart discussions and seek a resolution to this issue" said
Susan Petniunas, spokesperson for ACAH. "However, we remain opposed to any
efforts to tax U.S. lumber consumers, including import or export taxes."
"The U.S. requires at least a third of its lumber in the form of imports,
and Canada is the best source for it," she said. "We should move to free and
open markets between our two countries."
In the policy draft, Commerce Undersecretary Grant Aldonas said he would
seek input from lumber producers. "It is equally important that he also seek
input from those who use lumber and consumer interests, something that ACAH
will aggressively pursue," Petniunas said.
Petniunas said that recent proposals by Seattle-based forest producer
Weyerhaeuser, the British Columbia government, and the British Columbia
forestry industry association also are each a long way from relieving the
burden of the lumber dispute on consumers.
"Some of these proposals call for Canada to drop or suspend its appeals of
the U.S. countervail and antidumping duties before the World Trade
Organization and the North America Free Trade Agreement panels," she said.
"We believe that would be a significant error on the part of Canada. Canada
has already won major decisions earlier this year, and we are convinced that
if the appeals are allowed to conclude in a timely manner, Canada will win
again. This is the best route to free trade in lumber, and we hope Canada
will resist any temptation to stop those appeals, even if it does hold
discussions or look at interim measures."
She noted that the Commerce proposal clearly indicates that it is aware of
the roles the appeal processes play in an eventual solution to the problem,
and that the ACAH believes that one reason Commerce is pushing for a solution
now is because it too believes it will continue to lose in the WTO and NAFTA.
"Unfortunately, the Coalition's attempt to fix prices backfired, and
lumber prices have dropped significantly," Petniunas added. "All they have
succeeded in doing is creating great volatility in the market once again, and
to continue their negative impact on housing affordability."
"The final 27 percent countervailing and antidumping duties on finished
lumber for framing homes and remodeling, even at lower lumber prices, 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."
Consumers have some strong support on Capitol Hill. 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 two years, indicating their support for
free trade in lumber, and urging no new taxes or penalties on consumers.
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
and individuals. These industries employ more than 6.5 million workers, 25 to
one when compared with those in the forestry industry.
Members of ACAH include: American Homeowners Grassroots Alliance,
Catamount Pellet Fuel Corporation, CHEP International, Citizens for a Sound
Economy, Consumers for World Trade, Free Trade Lumber Council, Fremont Forest
Group Corporation, 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.