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    Trade Commission Urged to Focus on Consumers in Taking Action Related to Duties on Canadian Softwood Lumber

    12/05/2002
    on 12/5/02.

    American Consumers for Affordable Homes

    (ACAH) today called on the U.S. International Trade Commission (ITC) to focus

    on how border taxes, quotas, price controls and other trade distorting

    measures, particularly the 27 percent duties recently imposed on Canadian

    lumber imports, are hurting consumers.
    The ITC today held hearings on the competitiveness of the U.S. structural
    building components industry, which includes structural beams, arches, trusses
    and other wood products needed for home construction. In response to a
    request for this assessment by Senators Max Baucus (D-Mont.) and Charles

    Grassley (R-Iowa) and the Senate Finance Committee, the ITC has surveyed home

    builders, lumber dealers and other interested parties on the market for U.S.

    wood for structural building components and non-wood substitutes, and its

    impact on U.S. production and housing construction. The Senate request for

    the study was issued under Section 332 of the Tariff Act of 1930.
    In connection with the study, Senators Baucus and Grassley also directed

    the ITC to examine the effect of tariffs and other border measures on the

    domestic home building industry and U.S. homebuyers. The most significant of

    these is the 27 percent countervailing and anti-dumping duties on Canadian

    lumber imports imposed by the U.S. Commerce Department last spring
    "While we believe this study can provide useful information about lumber

    users, we hope that the ITC also will take into consideration the burden

    placed on consumers forced to pay the 27 percent duties on Canadian lumber
    imports," said Susan Petniunas, ACAH spokesperson. "The impacts are not just
    on lumber users; the current duties amount to a federally imposed sales tax on
    new home construction, remodeling and other applications for lumber. It is a
    tax on home buyers and home owners."
    Petniunas pointed out that even though current lumber costs have dropped,
    the duties add to the instability and volatility of the housing market.
    "Without trade-distorting border taxes or other interferences such as quotas,
    the cost of lumber would be dictated by the free market, allowing for longer
    term stability," she added. "Removal of border taxes benefits lumber dealers,
    home builders and, ultimately, consumers and the economy."
    The review is a new and separate action from the countervailing and
    anti-dumping duty investigation conducted by the Department of Commerce and
    the ITC earlier this year. Following the investigation, the Senate Finance
    Committee will receive a report next April on the impact of imports on the
    domestic users of lumber, including homebuilders, lumber dealers, and
    manufactures of building components. The investigation also gives the ITC an
    opportunity to assess the true impact of the 27 percent tariffs on U.S.
    consumers.
    According to Petniunas, these duties are particularly devastating for
    consumers because the U.S. cannot produce sufficient lumber to meet its needs.
    Approximately one-third of its lumber for building homes must come from
    imports, primarily from Canada. "The 27 percent countervailing and
    anti-dumping duties imposed on finished lumber for framing homes and
    remodeling, can 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."
    The impact on workers in the building trades and lumber-using jobs is
    another important factor that the ITC should consider in its investigation.
    Approximately six million U.S. workers are involved in lumber-using
    businesses, including homebuilders, remodelers, lumber dealers, and such
    industries as window, pallet and bed makers. "Workers associated with the
    consumers of lumber outnumber lumber-producing workers by 25 to 1 in the
    United States," Petniunas said.
    More than 100 members of the U.S. House and Senate have signed resolutions
    or written letters to President Bush over the past year, indicating their
    support for free trade in lumber, and urging no new taxes or penalties on
    consumers.
    This past summer, the World Trade Organization found that the Department
    of Commerce action imposing preliminary countervailing duties more than a year
    ago on Canadian softwood lumber imports was contrary to U.S. obligations under
    U.S. trade rules and should be overturned.
    Similar WTO challenges have been made by Canada on the final
    countervailing and anti-dumping duties imposed last spring. Challenges to the
    U.S. tariffs are also pending before dispute panels convened under the North
    American Free Trade Agreement.

    ACAH is an informal alliance opposed to any border measures or quotas on
    Canadian lumber imports Its members, who represent more than 95 percent of the
    domestic consumption of lumber, 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.