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U.S. Bows to NAFTA Panel Ruling on Canadian Lumber Duties

A decision last Friday by the U.S. International Trade Commission to abide by a recent North American Free Trade Agreement (NAFTA) ruling that unequivocally states that Canadian lumber imports pose no threat to the domestic lumber industry is a victory for housing affordability and free trade, according to NAHB.

“The ITC’s response in compliance with the NAFTA verdict, as required under U.S. and international trade laws, should pave the way for the removal of the 27% lumber tariffs that have acted as a hidden tax on American home buyers and consumers since they were first put in place in May of 2002,” said NAHB President Bobby Rayburn. “The U.S. government must put an end to further legal delaying tactics and allow these punitive duties to expire.”

Under international trade law, the ITC is required to bring its policies into line with the NAFTA panel’s findings. The NAFTA panel’s Aug. 31 ruling rejected U.S. claims that Canadian lumber imports are harming U.S. producers, which led to the ITC reversing its threat of injury determination. However, stating that it believed the NAFTA panel had overstepped its authority, the ITC said it had taken this action because it “respects and is bound by the NAFTA dispute settlement process.”

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Before issuing its latest verdict, the NAFTA panel ruled twice previously that injury threat allegations were baseless and contrary to law and ordered the ITC to review its arguments and present fresh evidence to back its claims. After giving the ITC three chances to make its case, the NAFTA panel concluded a further review would “be an exercise in futility.”

The ITC’s statement leaves open the possibility that the U.S. government might attempt to launch an “extraordinary challenge” to keep this case alive. From NAFTA’s inception, no side bringing about an extraordinary challenge case has ever won.

“U.S. lumber producers know there is virtually no chance they can be successful in this matter. However, they understand that as long as the case drags out, the tariffs will remain in effect and continue to pad their bottom line at the expense of U.S. consumers,” said Rayburn. “The government should spurn this cynical legal maneuver and act now to revoke the duties.”

For more information, e-mail Michael Strauss, or call him at 800-368-5242 x8252.
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