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

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.