U.S. finds reason to proceed with timber investigation

By Staff
From staff, wire reports
May 17, 2001
WASHINGTON  The U.S. International Trade Commission has found a reasonable indication'' U.S. softwood lumber producers may be threatened by allegedly subsidized and underpriced imports from Canada.
The decision Wednesday was immediately hailed by U.S. Rep. Chip Pickering, R-Miss., as a positive step.
Pickering had joined timber industry officials in announcing a lawsuit filed by the Coalition for Fair Lumber Imports in opposition to Canada's lumber trading practices. The petition followed the expiration of the U.S.-Canadian Softwood Lumber Agreement in March, which served to protect the U.S. timber industry against Canadian government subsidized timber imports.
With the expiration of that agreement, the U.S. timber industry seeks a new agreement between the two countries.
In a preliminary determination, the trade commission voted 5-0 Wednesday to continue its investigation into Canadian softwood lumber imports, with an initial finding that Canadian producers may pose a threat of injury to their U.S. counterparts. One commissioner abstained.
With its own investigation under way, the Commerce Department could impose a preliminary duty could as early as this summer.
Softwood lumber, commonly used for home construction, comes from firs, pines and other cone-bearing trees.
The dispute, which can be traced back more than 100 years, involves stumpage'' fees that Canadian provinces charge companies for logging government lands. U.S. producers say the fees are unreasonably low and give the Canadians an unfair trading edge.
Until March 31, Canada's softwood was imported under a 5-year-old agreement that allowed the country's four major lumber-producing provinces to export 14.7 billion board feet duty-free each year. Beyond that, graduated fees were charged.
The agreement expired, and no replacement has been negotiated. The issue has become one of the Bush administration's first trade problems with the United States' largest trading partner.
U.S. industry groups, including the Coalition of Fair Lumber Imports, the Brotherhood of Carpenters and Joiners, filed complaints April 2 alleging that Canada's product is subsidized and its producers dump their lumber in the United States at less than fair market value. They want the United States government to charge duties of as high as 78 percent on lumber brought from Canada.
Canadian producers deny the charges and demand free trade under the North American Free Trade Agreement.
In 1999, there were 807 softwood producers in the United States, concentrated in the West. The United States imported 36 percent of its supply last year, 94 percent of that from Canada.
On the Net: U.S. International Trade Commission: http://www.usitc.gov/