MORE BAD NEWS FOR LUMBER USERS AND HOMEBUYERS: COMMERCE DEPARTMENT LAYERS PENALTIES ON CANADIAN SOFTWOOD

Washington, DC - Consuming Industries Trade Action Coalition (CITAC) Chairman Jon Jenson voiced regret today that the Department of Commerce has decided to impose a preliminary antidumping duty on softwood lumber. The average 12.58 percent antidumping duty is in addition to the preliminary countervailing duty of 19.31 percent imposed on August 10, 2001 on imports of Canadian spruce pine fir.

"In August, Commerce applied a preliminary countervailing duty on Canadian softwood lumber. Today, they're layering antidumping penalties on top of that by levying an average 12.57 percent antidumping duty. These restraints are going to heavily burden downstream industries and hurt American consumers already suffering in the current economic downturn," said Jenson.

"This remedy will hurt more Americans than it helps by driving up the price of Canadian softwood imports," he continued. "These decisions are being made without adequate consideration of the consequences for downstream users and consumers. Restraints are being applied that will make home ownership much less attractive if not impossible for many, and will threaten businesses around the country that rely on these imports. In return, we maintain domestic industries that represent fewer jobs and less economic activity than our lumber-users and end consumers."

Jenson continued, "The duty imposed in August could reduce U.S. GDP by 0.05 to 0.11 percent at a time when growth is only at 0.3 percent. That doesn't sound like an economic stimulus to me."

In testimony before the ITC in April 2001, consumer groups told commissioners that they will be forced to import from elsewhere if Canadian softwood is limited by trade restrictions; the southern yellow pine that U.S. companies seek to protect is not a substitute. Lumber consumers also emphasized the harmful impact of restrictions on the more than six million workers employed by downstream industries - many more Americans than could be "protected" by trade restrictions.

Industries dependent on open markets for lumber include, among others, homebuilders, remodelers, lumber dealers, furniture manufacturers, makers of shelving and many other home accessories.

The U.S. Census Bureau has determined that the 19.31 percent duty will result in an increase of $1000 to $2000 on new homes. That translates into nearly 1.2 million American families, mostly low- and middle-income, who are priced out of the market for a new home. "The layering of an antidumping duty can only significantly worsen the outlook for American consumers interested in owning a home," said Jon Gold, Director of International Trade Policy for the International Mass Retail Association (IMRA), a CITAC-member organization and member of the Alliance of American Consumers for Affordable Housing, a broad-based alliance of lumber consumers.

According to Gold, "Home centers that sell products at retail and wholesale need the ability to stock their shelves to meet customer demand. These companies remain a bright spot in the lackluster consumer economy. Import restraints and taxes, whether imposed via trade remedies or via negotiations, will limit customer choice and ultimately affect retail sales."

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of U.S. firms.