U.S. Wants Wood Tariff; Commerce Says Canada Unfairly Subsidizes Its Exports

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Byline: Carter Dougherty, THE WASHINGTON TIMES

The Commerce Department wants to impose a 29 percent tariff on lumber imports from Canada on the grounds that the largest U.S. trading partner unfairly subsidizes its own timber mills and dumps the product in the United States at below-market prices.

The decision yesterday, which could raise the price of wood-framed houses, came one day after negotiations between the two nations to resolve their long-running disagreement over lumber reached an impasse.

The combination of circumstances prompted tough talk from Canada, which exports about $6 billion in softwood lumber such as pine, fir and spruce, to the United States each year.

"After all the efforts we have made in the last few months to really address the substance of the American allegations about the softwood-lumber issue, I have to tell you that I honestly find the [tariff] of 29 percent obscene," Canadian Minister for International Trade Pierre S. Pettigrew told reporters in Ottawa.

In contrast, American officials struck a more conciliatory tone, saying they wanted to continue talks and resolve the dispute once and for all.

"Our interest is in moving forward with the Canadians in as rapid a manner as possible," a U.S. trade official said on the condition of anonymity.

The dispute centers on Canada's system for allowing lumber companies to harvest timber from government-owned land. The United States has long said that Canada unfairly subsidizes its producers by keeping the fees they pay for this privilege artificially low, a charge Canada denies.

In the United States, most timber is harvested from private land. …