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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

    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.

    on 8/2/02.