5 pieces of wood cost Slocan $10m
Company charges U.S. used gift as foundation to build case for dumping
Gordon Hamilton Vancouver Sun
Friday, November 09, 2001
A gift to charity of five pieces of lumber is
going to cost Slocan Forest Products more
than $10 million in anti-dumping duties
after U.S. investigators used the lumber as
evidence the Richmond-based company is
dumping into the American market.
The U.S. commerce department made an
error by placing a value on the donation
and then refused to correct it, slapping a
19.2-per-cent anti-dumping duty on Slocan
last week, company president Jim Shepherd
charged Thursday.
The outraged Slocan president called the
lumber donation "the tale of the $10 million
picnic table" that "makes a mockery of commercial reality.
"This tiny quantity of wood, five lonely two-by-fours donated to charity
was used as a benchmark for arriving at the punishing duty our
company faces today," Shepherd said.
"To call it absurd is an understatement."
Shepherd accused the U.S. of deliberately distorting the charitable
transaction -- a gift to Kootenay Women in Trades and Technology -- to
put political pressure on Canada over the softwood lumber war.
The charity which promotes women in construction and related
occupations used the donation to frame a shed. Slocan donated a
variety of lumber sizes but it was the five 12-foot two-by-fours --
enough to make a picnic table -- the U.S. commerce department zeroed
in on.
U.S. investigators compared the price Slocan listed in its books for the
donated wood against the value of all 12-foot two-by-fours Slocan sold
into the U.S. market over a 12-month period. Slocan had entered the
lumber as a book entry in one ledger sheet for inventory purposes only
and identified it in another as a charitable donation, resulting in the
lumber having no value.
But the investigators used only the first entry, showing the lumber at
$30, an estimate of what the lumber would have been worth on the
day it was donated. That entry was above the value of similar lumber
Slocan sold over a 12-month period in the United States.
"It has no relevance in any comparison of pricing," Shepherd said.
"However, it was used as a comparison of pricing."
Commerce ignored Slocan's protests that the lumber was not sold,
even when Slocan presented both book entries to commerce officials,
Shepherd said.
Shepherd said the duty added up to three per cent to Slocan's total
19.2 per cent anti-dumping duty. That three per cent adds up to $10.5
million a year for the company.
It was one of many mistakes commerce officials made in setting the
anti-dumping duty, the Slocan president said.
Shepherd met later Thursday with Prime Minister Jean Chretien along
with other B.C. lumber producers to urge Chretien "to get down to
serious discussions" with the Americans about the lumber war.
"The message today is the folly of the process. How we can take a
business as important as this to our country -- the lumber business --
and be subject to this kind of attack and this kind of rationale for these
duties," Shepherd said.
B.C. producers, who account for more than half the country's $10 billion
annual trade in lumber with the United States, favour a negotiated
settlement over a protracted litigation through the World Trade
Organization but have begun fighting back.
Earlier this week Canfor Corp, Canada's largest lumber producer, filed
an action under a NAFTA provision against the U.S. government
claiming $250 million in damages.
Shepherd said Slocan is also considering a similar action.
Slocan is one of six Canadian forest companies investigated by the U.S.
commerce department and hit with preliminary anti-dumping duties Oct.
31 ranging from six per cent for West Fraser Timber to Slocan at the
top with 19.2 per cent.
All other Canadian companies were levied an average rate of 12.5 per
cent.
Slocan has been hit with a total of 38.5 per cent in both anti-dumping
and countervailing duties, a situation that the company cannot
tolerate, Shepherd said.
He said Slocan has not been dumping timber. In response to the U.S.
allegations that Slocan must be doing something wrong because it can
operate when other U.S. companies are forced down by markets, he
cited a 2000 PricewaterhouseCoopers financial study that identified
Slocan as the top forest company in North America.
The Canadian lumber issue has had a low profile in the United States.
When the anti-dumping duty was announced Oct. 31, Commerce
Secretary Don Evans issued a terse statement saying only that the
duty determination was "based on facts received before the
department with active participation of all parties."
© Copyright 2001 Vancouver Sun
canada.com{315DA7CE-DFB0-491A-AB0E-681D58F0A0CF}
[end quote] - this is just one example of the way the Kommerzwaffe plays with numbers to achieve their objectives, there are many many more |
