Reports of Deal to End Canadian Lumber Duties Upsets Consumers

Washington, DC, USA, 26 April 2006 -- /PRNewswire/ -- News reports of a U.S. proposal to end the dispute over Canadian softwood lumber import duties drew a heated response today from American consumer groups, charging that they only add extreme volatility to the price of lumber, flout the North American Free Trade Agreement, and would charge lumber consumers with what could be a permanent federally imposed tax on affordable housing.

"Our government should live up to the commitments we made in NAFTA rather than ignore it," said Susan Petniunas, spokesperson for American Consumers for Affordable Homes, an alliance of 17 consumer groups and trade association that account for more than 95% of U.S. consumption.

"Using what amounts to blackmail by threatening to file another Extraordinary Challenge in NAFTA Thursday (27 April) appears intended to force a quick backroom deal is just wrong," she added. "The filing is only a delaying tactic to put off the inevitable -- the U.S. clearly will lose again."

The United States has lost all of the significant challenges in the courts since 2001, but continues to say it will not comply with its NAFTA obligations. The United States has lost three unanimous and significant NAFTA panel decisions that the U.S. industry was not harmed and that Canadian softwood lumber is not subsidized. The United States has also lost most of its arguments in the World Trade Organization. Under NAFTA, the United States is obligated to end the duties and to refund more than USD 5 billion in illegal duties, with interest, to Canada.

"We cannot understand why Canada would trade its winning position that should end the duties under NAFTA for a deal that imposes border measures," Petniunas said. "If press reports on the leaked proposed deal are correct, it also involves manipulating the market through government-set prices for lumber, and the fluctuating value of Canadian currency."

Because of environmental restrictions on logging, the United States can not supply the required lumber to meet its home building, remodeling and other needs such as mattresses and bed frame manufacturing, and has to rely on imports for about a third of its softwood lumber requirements.

Commerce imposed antidumping and countervailing duties on Canadian softwood lumber imports that were initially 27%. Currently they have dropped to about 10% because of the legal process in NAFTA.

The duties were imposed after timberland owners and forestry companies, including International Paper, Potlatch, Plum Creek, Sierra Pacific, and Temple Inland, members of the Coalition for Fair Lumber Imports, charged that Canadian lumber is unfairly subsidized, and being dumped at lower prices in the United States. Not all U.S. forestry companies support the Coalition's position or cases.

ACAH does not oppose constructive negotiations to resolve the decades-long dispute, but opposes any agreement that imposes a border measure that would increase costs to consumers or add volatility to the lumber market.

More than 100 bipartisan members of the U.S. Senate and House of Representatives have called on the Bush Administration over the past three years to end the duties and to not impose any export taxes, duties or quotas on lumber that is essential to the U.S. housing market and economy.

Members of ACAH include: American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP International, C. J. Hodder Lumber Company, Consumers for World Trade, Free Trade Lumber Council, Furniture Retailers of America, The Home Depot, International Sleep Products Association, 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, Retail Industry Leaders Association, and the United States Hispanic Contractors Association.

Source: American Consumers for Affordable Homes