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U.S. Stalls Some More on Canadian Lumber Duties
Barry Rutenberg, a Florida home builder and member of the NAHB Executive Board, recently traveled to Ottawa with NAHB staff members to urge the Canadian government to stand its ground against lumber tariffs imposed by the U.S. Commerce Department.
Despite a clear North American Free Trade Agreement victory in August that should have removed the 21% duties on Canadian lumber imports, and another in early October that further undermined the justification for them, the U.S. has failed to rescind the duties.
Following NAHB’s suggestions, the Canadian government has moved away from negotiations and has adopted a tougher line in insisting that the U.S. follow the NAFTA decisions.
NAHB has opposed the duties and is also opposing any potential negotiated settlement that would replace the duties with quotas or an export tax. And in litigation that could take up to two years, Canada is suing the U.S. in the Court of International Trade to force compliance with the NAFTA verdict.
Rutenberg urged Canadian International Trade Minister James Scott Peterson and key members of the Canadian Parliament to stay the course with their legal cases, and not negotiate away their victory, a message that was well received. NAHB’s mission coincided with a visit by U.S. Secretary of State Condoleeza Rice in which the softwood lumber issue was a hot topic.
U.S. law allows countervailing duties to be imposed only on the condition that a foreign supplier is benefiting from subsidies and that U.S. producers are being injured, or threatened with injury, as a result.
A NAFTA ruling in August found unanimously that there was no injury or threat of injury, which paved the way for removing the tariffs and refunding to Canada the more than $4 billion in duties that have been collected.
Although NAFTA decisions carry the force of U.S. law, the U.S. Trade Representative elected to ignore the verdict while litigation continued at the World Trade Organization.
On Oct. 5, ruling that the Canadian lumber subsidy had been improperly calculated, a separate NAFTA panel ordered the Commerce Department by no later than Oct. 28 to revise its subsidy estimate in a way that would have reduced it to below 1.0%, which would have amounted to the same as zero.
Rather than responding to the deadline, the Commerce Department said that it needed further clarification.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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