To: marcos who wrote (2876 ) 8/7/2003 6:01:46 PM From: SofaSpud Read Replies (1) | Respond to of 37550 Don't blink on softwood, Canada urgedLumber lobby more interested in cash than free trade, says U.S. Home Builders official John Greenwood Financial Post Thursday, August 07, 2003 VANCOUVER - The next president of the U.S. Home Builders Association says the Washington-based lobby group responsible for putting lumber duties in place could not care less about free trade and is more interested in getting its hands on the $1.5-billion in duties already paid by Canadian producers. "This is all about money and greed," said Bobby Rayburn, first vice-president of the National Association of Home Builders, whose members account for about 80% of all residential construction in the United States. Many of the coalition members are located in the U.S. southeast, he said, where forests are made up largely of southern yellow pine, which yields inferior quality lumber. Given the choice, Mr. Rayburn said, U.S. homebuilders would rather use the straighter, more warp resistant boards produced by Canadian mills. But the 27% duties have forced up the price of good-quality lumber, forcing some builders to substitute southern yellow pine. The coalition is a group of about 250 forest companies bent on slowing the flow of Canadian lumber into the U.S. market, according to Mr. Rayburn. "Coalition members are very politically active, they provide a lot of campaign contributions and in many cases they provide planes to fly members of Congress around from district to district," he said. Thanks to lobbying efforts of the lumber coalition, the U.S. Congress passed a law giving such groups the power to fight foreign competitors by triggering trade penalties -- such as the lumber duties -- and to block deals they do not like. "Basically, they have veto power and I don't think that's right," Mr. Rayburn said. The comments come a week after the U.S. Coalition for Fair Lumber Imports blocked a draft agreement negotiated between Canada and the United States that would have ended the trade battle by putting a cap on Canadian imports. The giant U.S. lumber lobby argued the proposed deal did not hand U.S. producers a big enough advantage. "We don't think any duties should go back to Canada ... We're not about to go for that one," Dick Bennett, the coalition's western representative, said last week. Mr. Rayburn, who was speaking at an industry conference in Vancouver yesterday, believes it was a good thing the deal collapsed. Mr. Rayburn said it would have artificially restricted the flow of Canadian lumber into the United States, forcing up prices. Worse, it would have handed about half the duties already collected to members of the U.S. lumber coalition. "How dumb is that?" he asked. The coalition has said it wants all of the duties. Mr. Rayburn's group is a strong supporter of the Canadian lumber industry and has gone to considerable lengths to counter the lumber coalition's lobbying efforts. The coalition says that Canadian softwood producers benefit unfairly from government subsidies. The duties, which were imposed in May, 2002, have had a devastating impact, particularly in British Columbia, source of more than half of Canada's $10-billion a year in U.S. lumber sales. Ironically, while some provinces are pushing for a negotiated end to the dispute -- even if it means limiting the amount of U.S. sales -- Mr. Rayburn said Canada must hold out for free trade. Canada's best strategy may be to wait for legal challenges at the World Trade Organization and under the North American Free Trade Agreement to take their course, he said. Ottawa should "stay the course," he said, adding it should not give in to bullying tactics by the coalition. "Do not negotiate a deal." Since the early 1980s, Canada has fought four lumber trade battles with the Americans, who have alleged each time that Canada subsidizes its forest industry. In the first three battles, Canada has been vindicated, Mr. Rayburn said. jgreenwood@nationalpost.comnationalpost.com