U.S. Congress threatens to double softwood duty
with a file from Dan Rowe
Thursday, January 30, 2003
TORONTO -- The U.S. Congress has dramatically raised the stakes in the cross-border lumber trade feud by introducing legislation that could nearly double the duties on Canadian exports to the United States.
The proposed legislation, which surfaced a day before a key summit of industry officials in Washington, would push the U.S. duties to as high as 45 per cent from 27 per cent on roughly $10 billion worth of Canadian softwood lumber.
This is merely the latest pressure tactic in a struggle the Americans are losing, said Steve Crombie, the director of public affairs for Interfor, a B.C.-based lumber firm.
U.S. Senator Larry Craig insisted the law is desperately needed because Ottawa and Canadian lumber companies are cheating on the duty regime and flooding the U.S. market with cheap wood, the Globe and Mail's Web site reported.
"Recent blatant moves by the Canadian government and timber industry reveal their true desires to continue to flood the U.S. market with softwood lumber and their unwillingness to find a resolution that provides security for both U.S. and Canadian jobs," said Craig, co-sponsor of the Senate version of the bill.
A matching bill is also being introduced in the U.S. House of Representatives in what appears to be an orchestrated attempt to ratchet up the pressure on Canada to negotiate a quick end to the long-running dispute.
"I don't have a clue what he's talking about. All of the forest companies, at least in B.C., have all been working hard to cope with the duties." Crombie said.
The bills, which appear to have broad Republican and Democratic support, come as Canadian and U.S. lumber executives are due to meet top Bush administration officials Friday in Washington to explore a possible settlement.
Craig acknowledged the move is at least partly aimed at getting Canada back to the negotiating table.
"The timing is not very good. I don't know why the senator has chosen to make a move like this at this time," Crombie said.
"Going down to Washington, on our part, shows a great deal of goodwill."
Crombie said that if duties were raised to 45 per cent, some companies would have to consider not doing business in the United States.
Sebastien Theberge, Trade Minister Pierre Pettigrew's press secretary, suggested the U.S. lumber industry is worried and is "looking for ways to increase the price of wood because the duties have backfired."
A large chunk of the Canadian industry, including producers in Quebec and Ontario, has so far shown little interest in U.S. calls for sweeping reforms of Canadian forest practices. They have been pushing Ottawa to continue pursuing World Trade Organization and North American Free Trade Agreement challenges instead of settling out of court.
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