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NAFTA Ruling Should End Canada Lumber Duties
 A unanimous decision last week by a North American Free Trade Agreement (NAFTA) panel paves the way for the elimination of a hidden tax that has cost American home buyers and consumers more than $4 billion.
The ruling by the NAFTA Extraordinary Challenge Committee should end a drawn-out, three-year legal battle to overturn punitive tariffs on Canadian lumber shipments, said NAHB President David Wilson.
However, Wilson expressed concern over a statement from the Office of the U.S. Trade Representative suggesting that it might not comply with the ruling. "We urge the Administration to allow this final verdict to be implemented without further delay," he said, "and to immediately rescind the tariffs and return to Canada more than $4 billion in deposits that have been collected."
The U.S. government imposed anti-dumping and countervailing duties totaling 27% on softwood lumber in May of 2002, charging that Canadian imports represented a "threat" to domestic lumber producers. The percentage was subsequently reduced but remained above 20%.
Canada filed appeals to overturn the duties before NAFTA and World Trade Organization panels, which repeatedly ruled that the duties on lumber were inconsistent with international agreements and with U.S. law.
Last August, a NAFTA panel cleared the way for removing the burdensome tariffs on Canadian lumber when it unanimously ruled that there was no evidence to support the contention that Canadian lumber shipments threaten the domestic industry.
Last year's NAFTA verdict found no threat of injury from Canadian imports, which is the legal justification required for the duties to be imposed. It also stipulated that the U.S. was required to refund the billions of dollars that Canada had paid. A NAFTA ruling carries the weight of law in Canada, the U.S. and Mexico.
The domestic lumber lobby convinced the U.S. Trade Representative to file an "extraordinary challenge" under NAFTA, using that unusual procedure to keep the case alive so that duties would remain in effect. This last-ditch effort was unanimously rejected by the bi-national Extraordinary Challenge Committee last week.
Nearly 50 members of Congress have signed a letter to President Bush calling on the Administration to implement the NAFTA Extraordinary Challenge Committee ruling and to adhere to the international agreements that the U.S. has signed.
The letter states that the "current duties, which have been found illegal under both the WTO and NAFTA, deprive Americans of affordable housing, the first step in the American dream. The border taxes should be stopped at once, and past payments given back."
"Now that the legal challenges have run their course, it's time for the Administration to live up to its international obligations and stand up for American families seeking to become home owners by moving quickly to roll back the tariffs and refund all duties paid out by Canadian firms," said Wilson.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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