International free-trade panels do not support your forest lobby, nor the opinions you have based on listening to your politicos who have been bought by the well organized U.S. lumber lobby,...guess we'll see you socialists in court(ggggggggggg).
Wonder what kind of political clout your U.S. Homebuilding and Consumer and Retail groups will bring to bear on the issue this time?. They may be better organized and have more money to sling around this time thanks to the last decade of profitable sales,...perhaps they will be able to buy off more politicos than the lumber lobby can.
Ottawa and Vancouver — The United States said yesterday it will slap a crippling 19.3-per-cent tariff on Canadian softwood lumber, a duty domestic producers say will cost them hundreds of millions of dollars and potentially force them to cut jobs.
In a preliminary ruling, the Bush administration said the move was necessary to protect U.S. producers from unfairly subsidized Canadian competition. Should the decision hold up, the duties will be retroactive, forcing firms to pay a penalty on all lumber shipped to the United States since the end of March, when the 1996 Softwood Lumber Agreement between the two countries expired.
"This ruling is a body blow to forest-dependent communities in many parts of Canada, but especially in British Columbia," said John Allan, president of the B.C. Lumber Trade Council. "Jobs, families and communities have been put in direct jeopardy as a result of this decision that is politically motivated and completely without merit."
While producers in Atlantic Canada are exempt from the decision, the move could prove devastating to the lumber industry in British Columbia and Quebec, which accounts for about three-quarters of exports to the United States. By some estimates, the tariff could cost Canadian producers as much as $2-billion a year.
Larger companies may be able to absorb the added costs by stepping up production, but the duties could deal a fateful blow to the fortunes of smaller lumber mills, industry officials say. More trouble could still lie ahead. The American government is also expected to rule soon that Canadian producers have been dumping wood on the U.S. market since the SLA ended, raising the possibility of even stiffer penalties.
Trade Minister Pierre Pettigrew lashed out at the move yesterday, saying it was based on faulty mathematics.
"There is no basis in fact or in law for this finding," he said at a news conference in Montreal. "The Department of Commerce reached its conclusion by ignoring compelling factors to the contrary."
Softwood lumber, used primarily in the construction of homes, is Canada's single largest export to the United States, worth more than $10-billion a year. More than 300,000 people are employed in the lumber industry across the country.
The two countries have been fighting over lumber-trading rules for more than a century, and this is the fourth major lumber fight between the two in the past 20 years.
A truce was last reached in 1996 with the signing of the SLA, which effectively capped the amount of lumber Canada could export to the United States.
Since it expired, American producers have been pressing their government to take action to halt the flow of cheaper Canadian wood. Canada argues that softwood should be treated like any other good under the North American free-trade agreement.
In order to impose the retroactive duties, the United States was required to show there had been a 15-per-cent jump in softwood imports from Canada since the end of the SLA.
It did so by comparing the volume of imports in the first three months after the deal expired (April to June) with the previous three months, when the deal was still in effect (January to March). The U.S. Department of Commerce thus found a 31-per-cent leap, justifying the imposition of penalties.
However, Canada argues the U.S. Department of Commerce is in effect comparing apples to orangutans, since there is far more home construction in the April to June period than in the first three months of the year. Comparing the April-to-June period with the same three-month stretch a year ago shows only an 11-per-cent increase.
B.C. Forestry Minister Michael de Jong also scorned the ruling, saying the Department of Commerce caved in to pressure from the U.S. lumber industry.
"When you've got a rigged process, you usually end up with a biased, self-serving result," he said, adding that an unknown number of jobs would be lost in his province. "There are going to be casualties."
Mr. Pettigrew said Canada will now try and convince the Americans to change their ruling before a final decision is handed down this fall. If that fails, he said, Canada would battle Washington in U.S. courtrooms, before tribunals established by the North American free-trade agreement, and at the World Trade Organization.
"I'll tell you something, the Canadian government will appeal it before the courts and we will win," Mr. Pettigrew said. "I'm getting frustrated, I'll tell you that. It's very frustrating to hear Americans talk the rhetoric of free trade but when it comes time to act they support protectionist voices."
He dodged questions, however, about whether he'd be willing to spark a tit-for-tat trade war by implementing retaliatory tariffs.
Last month Canada took a pre-emptive measure, asking the WTO to force the U.S. government to refund any duties it imposes on imports of Canadian timber. The WTO process could take as long as a year.
In a statement, U.S. Commerce Secretary Don Evans rejected the idea that yesterday's decision was simply an attempt to pacify U.S. industry. He said it was only made "after careful consideration of the law and the facts on the record."
In fact, U.S. producers were upset the tariff wasn't higher. "This does not reflect the full magnitude of the subsidy and the damage we continue to sustain," said Rusty Wood, chairman of the U.S. Coalition for Fair Lumber Imports.
U.S. producers have long argued that Canada's forest industry is subsidized because most logging occurs on Crown land, and the "stumpage" fees charged to firms by provincial government for logging there is too low.
Most U.S. logging is done on privately owned land, and the industry there has contended for decades that stumpage fees in Canada are lower than costs. International trade panels have consistently ruled that Canadian logs are not subsidized.
British Columbia's giant forest companies slammed the decision, and asked the federal government to give no ground in the trade fight.
"The Bush administration has been waxing eloquent about being free traders," said David Emerson, chief executive of Vancouver-based Canfor Corp. "They have to be really ashamed about the hypocrisy they are showing. . . . This is really scandalous."
American consumer groups, who want to buy cheap Canadian lumber, also attacked their government's decision. Susan Petniunas, spokeswoman for the alliance of American Consumers for Affordable Homes, said the cost would eventually be borne by home buyers.
"We believe that a careful analysis will show that there is no factual basis, other than pure political pressure from a handful of U.S. forestry companies, for Commerce to impose what will amount to a hidden tax on all lumber used in homebuilding in the U.S." she said. "This penalizes consumers and hurts housing affordability."
With reports from Wendy Stueck in Vancouver and Tu Thanh Ha in Montreal |
