U.S. Consumers Bring Softwood Concerns to Canadian Parliament

Ottawa, British Columbia, Canada, 20 June 2006 -- /PRNewswire/ -- U.S. consumer group representatives were in Canada Monday to express concerns to members the House of Commons Standing Committee on International Trade over a proposed softwood lumber settlement agreement with the U.S. government that they believe would harm housing affordability and millions of U.S. consumers.

Rather than rushing to enact an ill-conceived agreement that would also constrain Canadian lumber companies by forcing them to abide by a complex system of quotas and border taxes, members of the American Consumers for Affordable Homes (ACAH) told lawmakers that their best strategy to achieve free trade and a complete refund of all duties collected is for Ottawa to continue to vigorously pursue its legal cases before the North American Free Trade Agreement, World Trade Organization, and the U.S. Court of International Trade. Through this process, Canada has already received several unanimous legal victories, and is close to achieving its aims as the cases move to their conclusion.

"We are disappointed by the willingness of the Canadian government to sacrifice those gains, jeopardize Canada's share of the U.S. market, and effectively provide a handful of U.S. companies with veto power over provincial forest policies," said Barry Rutenberg, a home builder from Gainesville, Florida, who testified on behalf of the U.S. National Association of Home Builders and its 225,000 member firms who employ more than 8 million workers.

"Finishing the litigation would establish important precedents and make it much more difficult for the U.S. lumber coalition to successfully petition for new duties," he added.

Rutenberg also noted that even though the proposed accord is likely to artificially inflate lumber prices, they are still expected to be below the threshold set forth in the accord that would trigger the most stringent fees and duties.

Rutenberg's views are supported by ACAH, which consists of other lumber- dependent industries and consumers who represent more than 95% of domestic consumption. Susan Petniunas, spokesperson for ACAH, also was in Ottawa meeting with Members of Parliament on their concerns.

"This so-called framework would put in place a way for our governments to artificially fix lumber prices, agreed to by the U.S. and Canadian government," Petniunas said. "While there is talk that this deal can lead to free trade, this is clearly managed trade to prop up prices, rather than letting supply and demand determine prices."

"The U.S. government and lumber industry have said that trade barriers are necessary because Canadian timber sales are not market based, but the proposed agreement would make it more difficult to institute market-based reforms such as those occurring in BC, and doesn't include provisions to eliminate fees and quotas as a result of market-based policy changes, making free trade a total myth," Petniunas said.

"We have worked hard to convince policy-makers in the U.S. that Canadian lumber is not unfairly traded and that barriers to lumber imports hurt U.S. consumers," Rutenberg told the Trade Committee. "Several major newspapers across the U.S. -- including the Wall Street Journal, the Los Angeles Times, the Detroit Free Press, and the Orlando Sentinel -- have published editorials reflecting this view, and more than 100 members of Congress have gone on record in support of the consumer perspective.

"This deal sends the message that the U.S. lumber coalition's claims are legitimate and that Canada has been at fault," Rutenberg added. "We don't believe that to be true, and we don't understand why Canada would want to create that impression."

Petniunas said, "No rational Canadian company will ever use the NAFTA dispute process again if Canada agrees in this deal that it has given up its right to get all illegally collected duties back."

Rutenberg pointed out that the proposed deal will mean less affordable homes in the U.S., use of less suitable building products, and business risk for builders facing less-certain supplies and prices. He said that NAHB, whose member companies account for more than two-thirds of all lumber used in the U.S., would feel obligated to facilitate additional imports from Europe and use of alternative materials.

Members of ACAH include the American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP International, C. J. Hodder Lumber Company, Consumers for World Trade, Free Trade Lumber Council, Furniture Retailers of America, The Home Depot, International Sleep Products Association, Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Association of Home Builders, National Black Chamber of Commerce, National Lumber and Building Material Dealers Association, National Retail Federation, Retail Industry Leaders Association, and the United States Hispanic Contractors Association.

Source: American Consumers for Affordable Homes