Canada Fumes over Small Tariff Cut

The Register Guard (Eugene, OR), December 15, 2004 | Go to article overview

Canada Fumes over Small Tariff Cut


Byline: From Register-Guard and news service reports

The federal government reduced punitive tariffs on imports of Canadian softwood lumber on Tuesday but by less than Canada had wanted, extending a heated cross-border dispute.

Canadian officials denounced the decision and said they would challenge it.

The Commerce Department decision would cut tariffs from an average of 27.2 percent to 21.2 percent. A preliminary U.S. decision had recommended that tariffs be cut in half for easy-to-saw pine, spruce and other softwood lumber used to build homes.

Commerce said the final decision accurately reflected subsidies by six Canadian provinces that allow their producers to sell lumber in the United States at below normal value - at prices that compete unfairly with U.S. producers.

While the U.S. timber industry has generally applauded the tariffs - because they keep import prices high and thereby allow domestic producers to charge higher prices - home builders on both sides of the border say they have driven up the cost of new homes in the United States and hurt Canadian lumber exporters and communities that depend on them.

Some environmentalists favor the tarrifs, saying they have somewhat reduced the pace of devastating clear-cut logging that Canadian officials allow on vast swaths of pristine government-owned forestland.

The United States imported about $4.6 billion of softwood lumber from Canada in 2003, about a third of the American market.

Butch Bernhardt, spokesman for the Portland-based Western Wood Products Association, said the effect of Tuesday's decision on Oregon's lumber mills "will be none."

"This is part of a battle that's been going on for two and one-half years. There are still a number of appeals left and some additional actions such as by the World Trade Organization," Bernhardt said. "This has been going on so long, the marketplace has pretty much factored decisions like this in."

The duties imposed on Canadian lumber up to now "have not reduced the volume coming into the (U.S.) market," he said.

The United States imports 20 billion board feet of softwood lumber from Canada annually and doesn't have the capacity to produce that much more domestically, Bernhardt said. …

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