treeclimber165
Member A.K.A Skwerl
Bad news for the lumber industry in Canada. Just pulled this off the headlines:
US Gives Canada Lumber 19 Percent Duty
By Richard Cowan
WASHINGTON (Reuters) - U.S.-Canada relations soured Friday with a Commerce Department announcement that it will slap a new 19 percent import duty on billions of dollars worth of softwood lumber used by the housing construction industry.
American homebuilders, who want a free flow of cheap lumber, immediately protested the move, saying the duty will mean higher prices on new homes.
But U.S. lumber industry officials countered that the intervention was needed to combat illegal subsidies being provided by all of Canada's provincial governments, except the four maritimes. Those subsidies, they say, have contributed to U.S. mill closings and job losses.
This latest chapter in a trade fight that has been going on for at least 20 years brings an added bite to Canada. In declaring the new 19.31 percent countervailing duty, the Bush administration also found that Canada flooded the U.S. market with wood this spring, after trade controls expired.
As a result, the duty will be retroactive to early May, a Commerce Department official said.
Last year, Canada shipped 18.3 billion board feet of softwood lumber to the United States, valued at $6.4 billion (C$10 billion) and accounting for about a third of the U.S. market.
CANADA CRIES PROTECTIONISM
Canadian officials Friday accused the Bush administration of taking a ``protectionist approach'' to trade.
Trade Minister Pierre Pettigrew, saying the U.S. decision had ``no basis in fact or law,'' gave notice that his government is prepared to mount legal challenges to the new duty.
The duty, if upheld by the Commerce Department in a final decision set for Oct. 23, would cost Canadian lumber producers about $2 billion a year in lost business, according to industry officials there.
British Columbia, the leading softwood lumber exporter to the United States, would be particularly hard-hit. ``This ruling is a body-blow to forest-dependent communities in many parts of Canada, but especially in British Columbia,'' BC Lumber Trade Council President John Allan said.
The Commerce Department could deliver another punch in coming weeks.
On Sept. 24, the department is supposed to announce its preliminary decision on whether anti-dumping duties as high as 38 percent should be added to the countervailing duties on Canada's softwood lumber shipments.
The anti-dumping allegations brought by U.S. companies contend that Canadian companies have been exporting their wood south at less than fair value.
A final decision in both cases is set for Dec. 8, just weeks after the World Trade Organization hopes to launch a new trade negotiating round aimed at reducing obstacles to trade, especially in the agriculture sector.
STUMPAGE FEES THE VILLAIN
A Commerce Department official, who asked not to be identified, told reporters on Friday that Canadian provincial government ``stumpage fees'' were the primary reason for the 19.31 percent duty.
Those fees, which Canadian companies pay to the provinces for harvesting publicly-owned trees, are priced ``below market'' and represent a subsidy that violates WTO rules, he said.
Conversely, U.S. lumber companies and Canadian firms in the Atlantic Coast maritime provinces rely on privately-owned trees for their lumber supply.
``We compared stumpage prices in Washington State versus British Columbia,'' the Commerce official said, giving an example of how the decision on illegal subsidies was made.
The Commerce Department investigation of Canada's lumber production and export practices began in April, shortly after a bilateral deal expired limiting Canada's annual duty-free exports to 14.7 billion board feet.
Since then, Washington and Ottawa have danced around the notion of negotiating a new agreement that would end the long, multimillion-dollar litigation and trade uncertainties.
Some sources here have insisted that once the Commerce Department announced preliminary duties, Canada would be more motivated to negotiate.
``We would hope Canada would come to the table...otherwise we are going to be fighting this forever,'' said Rusty Wood, head of the U.S. industry coalition pushing import controls.
But unless a deal is reached, the battle could continue for years, assuming Canada lives up to its promise to appeal any duty to a NAFTA dispute panel, the WTO or a U.S. court.
In the meantime, the National Association of Homebuilders claims the 19.31 percent countervailing duty could add about $1,000 to the price of a new home.
But like all things related to U.S.-Canada lumber trade, even that figure is disputed.
The U.S. lumber industry notes that average U.S. home prices hit record highs last year, despite record low lumber prices. That, the industry says, is ``proof that lumber prices aren't the reason for soaring housing costs.''
US Gives Canada Lumber 19 Percent Duty
By Richard Cowan
WASHINGTON (Reuters) - U.S.-Canada relations soured Friday with a Commerce Department announcement that it will slap a new 19 percent import duty on billions of dollars worth of softwood lumber used by the housing construction industry.
American homebuilders, who want a free flow of cheap lumber, immediately protested the move, saying the duty will mean higher prices on new homes.
But U.S. lumber industry officials countered that the intervention was needed to combat illegal subsidies being provided by all of Canada's provincial governments, except the four maritimes. Those subsidies, they say, have contributed to U.S. mill closings and job losses.
This latest chapter in a trade fight that has been going on for at least 20 years brings an added bite to Canada. In declaring the new 19.31 percent countervailing duty, the Bush administration also found that Canada flooded the U.S. market with wood this spring, after trade controls expired.
As a result, the duty will be retroactive to early May, a Commerce Department official said.
Last year, Canada shipped 18.3 billion board feet of softwood lumber to the United States, valued at $6.4 billion (C$10 billion) and accounting for about a third of the U.S. market.
CANADA CRIES PROTECTIONISM
Canadian officials Friday accused the Bush administration of taking a ``protectionist approach'' to trade.
Trade Minister Pierre Pettigrew, saying the U.S. decision had ``no basis in fact or law,'' gave notice that his government is prepared to mount legal challenges to the new duty.
The duty, if upheld by the Commerce Department in a final decision set for Oct. 23, would cost Canadian lumber producers about $2 billion a year in lost business, according to industry officials there.
British Columbia, the leading softwood lumber exporter to the United States, would be particularly hard-hit. ``This ruling is a body-blow to forest-dependent communities in many parts of Canada, but especially in British Columbia,'' BC Lumber Trade Council President John Allan said.
The Commerce Department could deliver another punch in coming weeks.
On Sept. 24, the department is supposed to announce its preliminary decision on whether anti-dumping duties as high as 38 percent should be added to the countervailing duties on Canada's softwood lumber shipments.
The anti-dumping allegations brought by U.S. companies contend that Canadian companies have been exporting their wood south at less than fair value.
A final decision in both cases is set for Dec. 8, just weeks after the World Trade Organization hopes to launch a new trade negotiating round aimed at reducing obstacles to trade, especially in the agriculture sector.
STUMPAGE FEES THE VILLAIN
A Commerce Department official, who asked not to be identified, told reporters on Friday that Canadian provincial government ``stumpage fees'' were the primary reason for the 19.31 percent duty.
Those fees, which Canadian companies pay to the provinces for harvesting publicly-owned trees, are priced ``below market'' and represent a subsidy that violates WTO rules, he said.
Conversely, U.S. lumber companies and Canadian firms in the Atlantic Coast maritime provinces rely on privately-owned trees for their lumber supply.
``We compared stumpage prices in Washington State versus British Columbia,'' the Commerce official said, giving an example of how the decision on illegal subsidies was made.
The Commerce Department investigation of Canada's lumber production and export practices began in April, shortly after a bilateral deal expired limiting Canada's annual duty-free exports to 14.7 billion board feet.
Since then, Washington and Ottawa have danced around the notion of negotiating a new agreement that would end the long, multimillion-dollar litigation and trade uncertainties.
Some sources here have insisted that once the Commerce Department announced preliminary duties, Canada would be more motivated to negotiate.
``We would hope Canada would come to the table...otherwise we are going to be fighting this forever,'' said Rusty Wood, head of the U.S. industry coalition pushing import controls.
But unless a deal is reached, the battle could continue for years, assuming Canada lives up to its promise to appeal any duty to a NAFTA dispute panel, the WTO or a U.S. court.
In the meantime, the National Association of Homebuilders claims the 19.31 percent countervailing duty could add about $1,000 to the price of a new home.
But like all things related to U.S.-Canada lumber trade, even that figure is disputed.
The U.S. lumber industry notes that average U.S. home prices hit record highs last year, despite record low lumber prices. That, the industry says, is ``proof that lumber prices aren't the reason for soaring housing costs.''
