The
Bush Administration and Lumber: The Game Continues
The United States and Canada have been embroiled in a legal battle these past
three years over softwood lumber imports. Softwood lumber is used by the homebuilding
industry to frame new homes. The U.S. industry claims that Canada illegally
subsidizes and dumps their lumber in the U.S. market. The U.S. government
agrees and has imposed duties ranging up to 27 percent on Canadian lumber
imports. The result is higher housing costs that price as many as 300,000
low-income families right out of the market. Why would the Administration
do such a heartless thing to its own people? Does that portion of the American
lumber industry that called for these duties really deserve to preserve its
market share at the expense of the poor? And why would the Administration
ignore this NAFTA panel ruling, effectively nullifying a treaty that has benefited
us enormously over the last ten years?
There are a number of factors at work:
1) Consumers of lumber have been mute for too long. For years the U.S. lumber industry has insisted that Canada unfairly subsidizes and dumps lumber into our market. Only in recent years have importers and consumers of lumber begun to counter this claim. The Administration is not accustomed to listening to any other point of view and is having trouble accommodating more than one party.
2) The U.S. government does not have a history of championing the interests of consumers. U.S. trade law does not require the government to consider the impact of punitive duties on consumers before imposing them. As a result duties are often imposed at the request of a particular industry without first analyzing the effect on downstream industries, their employees, and their customers. Often more Americans are hurt than are helped. This is a major flaw in U.S. trade law.
3) The U.S. government is stalling the Canadians in an effort to force them to negotiate a settlement that will restrict imports of lumber into the United States. Possible ways of doing this include the imposition of an export tax on the Canadian side of the border. Canadians will tax their own exports thereby raising money for the Canadian National Treasury. Of course, the cost of this export tax will be passed along to American consumers, thereby resulting in a transfer of wealth from American citizens to the Canadian government. Americans lose out twice - once in their capacity as consumers of lumber when they are forced to pay higher prices for their newly built homes and a second time as tax payers when their tax dollars go to the Canadian government rather than their own. The Bush Administration views this as an acceptable solution. Do you?
After Hurricane Katrina laid waste to thousands of home along the Gulf Coast, Majority Whip Roy Blunt sent a letter to President Bush asking that he repeal the duties on lumber and cement, so that the cost of rebuilding the region would not be any higher than necessary. Hurricane Rita also destroyed thousands of additional homes in Texas. Will the Administration do the right thing?
At a recent Senate confirmation hearing Chairman of the Senate Finance Committee Charles Grassley said, "When governments impose tariffs and other restrictions on goods and services, they increase the cost of those goods and services to consumers and limit their freedom of choice. Government tariffs and restrictions can also stifle innovation and drive up the costs of producing in this country by increasing the costs of inputs, which can needlessly inhibit our ability to compete internationally." He is absolutely right!
CWT urges you to contact the President and recommend he repeal lumber and cement duties. There are so many reasons why this needs to be done and no good reason to keep the duties in place.
You may send the President
an email at comments@whitehouse.gov.