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Builders Caution Canada Not to Settle With U.S. on Softwood Lumber Dispute

With the prospect for free trade on softwood lumber near, NAHB met with Canadian government officials in Ottawa last week to urge them to abandon efforts to negotiate a settlement with the U.S. on the protracted dispute over import duties.

Representing NAHB at the talks, Barry Rutenberg, a member of the NAHB Executive Committee and president of Gainesville, FL-based Barry Rutenberg Homes, told International Trade Minister Jim Peterson and other government officials that a settlement could result in quotas, taxes or other border measures that would raise lumber prices in the U.S. and force builders to turn to other materials or to lumber from other countries.

“The goal of the National Association of Home Builders is not to have subsidized lumber,” Rutenberg said. “The interest is fair trade that is determined by market forces and not by some export agreement.”

Last month, the U.S. International Trade Commission agreed to comply with a North American Free Trade Agreement decision that unequivocally concludes that U.S. lumber producers are not threatened with material injury from Canadian imports.

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That response, as required under U.S. and international trade laws, paves the way for the removal of the punitive 27.2% percent lumber tariffs that have been in place since May of 2002. Canadian firms also stand poised to receive a 100% refund of the more than $2.8 billion in duties paid to date.

Although a final resolution of the case is expected in March, Peterson indicated that Canada was also leaving the door open to a negotiated solution.

In comments widely circulated by the Canadian media, NAHB President Bobby Rayburn said that in light of Canada’s strong legal standing in this case, this is the wrong time to be offering new concessions.

“With free trade in sight, negotiating a settlement in a misguided bid to stave off future litigation would play right into the hands of the U.S. lumber firms,” said Rayburn. “Giving the money to U.S. producers only gives them an incentive to keep seeking protection. Such protectionist measures are bad trade policy and bad economic policy, and they are not in the national interest of Canada or the United States.”

For more information, e-mail Jason Lynn at NAHB or call him at 800-368-5242 x8307.
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