Trade Panel Upholds U.S. Lumber Tariffs

Article excerpt

Byline: Register-Guard and news service reports

WASHINGTON - An international trade panel on Wednesday rejected Canada's claim that the United States had no basis to impose tariffs on softwood lumber used to build homes.

The panel of three American and two Canadian judges, set up under the North American Free Trade Agreement to deal with trade disputes, upheld U.S. claims that Canada subsidizes its timber industry and therefore is subject to tariffs.

The NAFTA panel, however, said the duties, averaging 27 percent, may be too high.

The legally binding ruling means the U.S. Commerce Department must recalculate - and likely reduce - the tariffs within 60 days. The decision also could put pressure on Canada to reform its timber industry and move toward a more market-based system like that in the United States.

The ruling is important for lumber mills in Oregon and across the country because the tariffs offer them protection against lower-cost boards from Canada.

As environmental regulations and lawsuits have slowed the amount of logs U.S. mills are able to harvest of public lands, U.S. producers have to compete on the open market for a tight supply of timber from private lands.

By contrast, in Canada, the government grants lumber producers licenses to log public lands. The lower prices those firms pay for logs depend on several factors, including the going price of finished lumber and the number of workers a mill employs.

U.S. …