Consumers urge Bush: Illegal duties on Canadian Softwood lumber should end

By: | at 08:00 PM | International Trade  

US consumer groups have called on the Bush Administration not to appeal a decision by the US Court of International Trade saying that the US had violated its own law by applying the “Byrd Amendment” to countervailing and antidumping duties imposed on Canadian softwood lumber imports. The so-called Byrd Amendment refers to a law enacted by Congress that takes duties placed on imports and distributes those funds to protectionist U.S. companies that sought the restrictions.

What the court ruling says is that the Byrd Amendment cannot be applied to imports from Canada and Mexico since the North American Free Trade Agreement (NAFTA) requires that any legislation of this nature had to specifically name Canada and/or Mexico in the legislation in order to make the transfer of funds legal. The Byrd Amendment did not do so.

The World Trade Organization (WTO) ruled that the Byrd Amendment was illegal under WTO rules, and directed the US to remove it, something that finally was accomplished in legislation passed late last December, with Vice President Richard Cheney casting the one vote needed in the Senate, clearly reflecting the Administration’s viewpoint on Byrd.

“This decision clearly supports the spoken objective of this administration to end the Byrd Amendment and comply with the WTO,” said Susan Petniunas, spokesperson for American Consumers for Affordable Homes, an alliance of 17 organizations representing more than 95% of US lumber consumption.

“Appealing the CIT ruling would be acting just the opposite of stated Administration policy, and be supporting an illegal application of duties to lumber from Canada,” Petniunas said. “It would also mean that the Administration supports the potential disbursement of more than $4 billion of duties already collected to a special interest group, rather than leaving it with the US Treasury at a time of an unprecedented budget deficit.”

“The Byrd Amendment only stimulated US lumber companies to seek duties so that they would benefit by taking dollars from US consumers on Canadian softwood lumber that is essential for our housing industry,” she added. “With this court decision, getting that money is no longer a possibility, and removes the leading negotiating chip from the US Coalition for Fair Lumber Trade. While we expect the Coalition to appeal, we believe that this ruling will not be overturned.”

“US consumers have labored under these illegal lumber duties for far too long,” Petniunas said. “ACAH calls on the Administration to respect its international obligations under NAFTA, to not appeal this recent Court of International Trade decision, and to revoke the unlawful duties immediately.”

Commerce imposed antidumping and countervailing duties on Canadian softwood lumber imports in 2001 that were initially 27%. Currently they have dropped to about 10%.

The duties were imposed after timberland owners and forestry companies, including International Paper, Potlatch, Plum Creek, Sierra Pacific, and Temple Inland, members of the Coalition for Fair Lumber Imports, charged that Canadian lumber is unfairly subsidized, and being dumped at lower prices in the US. Not all US forestry companies support the Coalition’s position or cases.

Petniunas said that the lumber duties, based on US Census Bureau data, add at least $1,000 to the cost of a new home, pricing as many as 300,000 families out of the housing market since the small amount prices them out of a mortgage. The duties also have impacted a wide range of other industries using Canadian softwood lumber, such as truss manufacturers, pallets, cabinets, furniture and box springs, manufactured housing, as well as lumber wholesalers and retailers. These industries employ more than 6.5 million workers, 25-to-1 when compared with those in the forestry industry.

The US cannot produce enough lumber to meet its needs, and has to import a third of it from Canada.

ACAH does not oppose constructive negotiations to resolve the decade’s long standing dispute once and for all, but opposes any agreement that imposes


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