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Strategies & Market Trends : Fascist Oligarchs Attack Cute Cuddly Canadians -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (529)	9/2/2002 8:40:18 PM
From: Eashoa' M'sheekha	Read Replies (1) \| Respond to of 1293

U.S. aims new 'bullet' at lumber products Value-added industry targeted, expert says Gordon Hamilton Vancouver Sun A new U.S. investigation into alleged subsidies in imported wood products was described Wednesday as "a bullet" aimed straight at Canada's value-added industries. In B.C. alone, value-added wood producers have sales of $2.9 billion a year and employ 14,000 people in about 700 businesses. Consultant Peter Woodbridge said while the investigation into structural building components by the U.S. International Trade Commission is not singling out any country by name, most imports are from Canada. The new investigation comes at a time when another U.S. agency, the department of commerce, is floating an olive branch to settle the softwood lumber dispute. Woodbridge said the new allegations of subsidy are largely the result of market distortions caused by the 27.2-per-cent softwood lumber duty, which U.S. producers initially wanted implemented to make Canadian products more costly. In fact, large Canadian mills have produced more lumber to get their unit costs down and a domestic market has developed in Canada, where lumber sells at 25 per cent below the cost of lumber exported to the U.S. Woodbridge said the softwood duties -- which the U.S. imposed to aid domestic industries -- are the cause of much of the grief. "The duty has created all sorts of distortions in the market. It's very difficult to see how this is all going to sort itself out." Western U.S. manufacturers of roof trusses rely on Canadian lumber for their products and the two-tiered pricing system means they are paying more for their lumber than their Canadian competitors. That gap has given the B.C. truss industry an unanticipated edge over its U.S. competitors. "This shows the perversity of trying to solve problems by imposing duties," Woodbridge said. "This is not a scattergun approach the Americans are taking. This is a direct bullet aimed at our value-added producers." The ITC launched the investigation after receiving a request from the Senate Finance Committee, which was lobbied by the Wood Truss Council of America to investigate the conditions of competition in the U.S. building components market. Woodbridge said there has been unrest in the U.S. industry for several years, but Washington and Oregon truss producers are now hopping mad over what they see as an unfair break Canadians are getting through the duty-induced two-tiered lumber pricing. "They are absolutely livid down there. They are mad as hell," said Woodbridge, who recently visited U.S. truss operations as part of a larger research report he is preparing. Specifically, the U.S. investigation is targeting manufacturers of building trusses used in home construction, as well as manufacturers of laminated wood, panel components and possibly log houses. B.C.'s main competitor in the log home business is Montana, home state of Senator Max Baucus, chairman of the Senate finance committee. Those industries were exempted from the 27.2-per-cent countervailing and anti-dumping duties imposed by the U.S. last May. Now, thanks to the Senate finance committee, the ITC has them in its sights, Woodbridge said. How serious this latest U.S. investigation is remains to be seen. The investigation is several steps removed from an actual countervailing duty petition. Even if it were to go that far, B.C. forests ministry statistics show that Canada's value-added building components exports account for only seven to nine per cent of the U.S. market. It takes 10 per cent of the market for a country to be vulnerable to U.S. countervailing duties. "But we are aware of what they are doing and we are paying close attention to it," said Mike Hogan, director of communications for the forests ministry. At Landmark Truss & Lumber, an Aldergrove manufacturer of trusses and machine-stress-rated lumber used for trusses, general manager Ken Landis said it is too early to speculate on the significance of this latest U.S. move. The ITC hearing is Dec.5 and its report is not to be submitted to the U.S. Senate Finance Committee until April 30, 2003. Landis said he views the investigation as part of the over-all U.S. softwood strategy. "They send a team up here and say they want to do a deal while they have another team still throwing darts at us and saying they want to hurt us." Landmark has been hit hard by the softwood dispute as it is, Landis said. Its machine stress-rated lumber business to U.S. truss manufacturers has shrunk by 70 per cent because of the softwood duties on the lumber. Now, after intense lobbying by those U.S. manufacturers, Landmark's truss exports are being targeted. "I think they want to use it as political leverage. When they are negotiating on softwood they will say, 'We will not investigate structural components if you concede on another issue,'" Landis said. Value-added exports to the U.S. account for two per cent of the U.S. market, compared to 18 per cent for softwood lumber. The softwood duty already covers other sectors of the value-added industry, such as manufacturers of finger-jointed lumber. ghamilton@pacpress.southam.ca