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

08/02/2002
on 8/2/02.

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
review;

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.