- The Washington Times - Saturday, August 11, 2001

The Commerce Department yesterday announced plans to slap imports of Canadian lumber with tariffs of nearly 20 percent.
In a move likely to heighten tension with America's largest trading partner, the Bush administration accused Canada of unfairly subsidizing its own lumber mills.
Commerce Secretary Donald L. Evans said in a statement that the department reached the decision "after careful consideration of the law and the fact on the record."
The Bush administration has been under intense political pressure from the American lumber industry from the moment it took office in January to curb imports of Canadian products into the United States. Lumber mills, reeling from the closure of 16 mills this year, marshalled political support in the Senate and the House for its case.
"We hope today's announcement will mark the beginning of the end of unfair Canadian subsidies," Republican Sens. Olympia J. Snowe and Susan Collins of Maine said in a joint statement.
The industry believes Canada subsidizes its mills by keeping the fees the mills pay for harvesting wood from public land artificially low, which Canada has steadfastly denied.
Trade Minister Pierre Pettigrew said in a statement that the duties have "no basis in fact or in law."
U.S. Trade Representative Robert B. Zoellick has tried to interest Canadian officials in a negotiated solution to the dispute, so far unsuccessfully.
The fight has dragged on for more than a decade, and Canada could ultimately fight the United States through the North American Free Trade Agreement (NAFTA) or the World Trade Organization (WTO).
The department's move will hit Canadian imports of softwood lumber those used in building, such as pine and cedar with the duties as soon as the decision is published in the Federal Register, sometime next week.
The department was required by law to respond this month. The U.S. industry filed a trade case with Commerce in April, when it requested duties of 40 percent.
The duties will stay in play for five years, unless the International Trade Commission, an independent body, concludes that the Canadian action has not harmed U.S. companies. If it finds no harm, the duties already collected would be refunded.
That decision is expected early next year, after Commerce finalizes its decision on Dec. 8.
John Ragosta, a lawyer with the Coalition for Fair Lumber Imports, an industry group, said companies were nevertheless "very pleased" with the announcement.
He said lumber firms would still try to increase the duties before December.
"We think the [unfair Canadian] subsidies are larger," Mr. Ragosta said. "We plan to show that."
Canada would still have the option of mounting a challenge to the duties, either through NAFTA or in the WTO.
Home-building groups harshly criticized the administration's move, saying the trade case has jacked up the price of a new home.
"Everyone knows [the duties] get passed on to the consumer," said Susan Petnunias, a spokeswoman for American Consumers for Affordable Homes, a coalition of building and retailing groups.
Michael Carliner, an economist with the National Association of Home Builders, said lumber prices already began to rise in April when the U.S. industry filed the case, adding about $1,000 to the cost of a new home.
"If they had approved a lower tariff, we might have gotten a decrease," Mr. Carliner said.
The lumber industry believes that the effect of trade restraints on consumers is negligible because wood represents only a fraction of the cost of the average home.
In late September, the Commerce Department will rule on another request by the industry, the charge that Canadian companies have "dumped" wood on the U.S. market at below the cost of production. They want the government to hit Canada with an additional tariff of 30 to 40 percent, on top of the one announced yesterday.

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