Nation's Building News Online

Lumber Talks Hit a Bump in the Road

Discussions between the U.S. and Canada over 27% tariffs on softwood lumber imports from the northern provinces reached a temporary impasse two weeks ago over the specifics of a proposed interim export tax.

The duties currently in effect can add more than $1,000 to the cost of building a new home and represent a hefty hidden tax on American home builders, renters and consumers, NAHB has found.

The major difference between the new interim tax and the existing tariffs it would replace is that the levies would be collected by the Canadian government instead of the U.S. For American consumers, the end result still would be higher costs for housing and wood products. The new “temporary” plan could last for several years.

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NAHB remains opposed to quotas, tariffs or export fees because they distort the marketplace and push residential construction costs higher by creating huge volatility in lumber prices.

NAHB favors restoring free trade on softwood lumber and has said that Canada’s legal appeals before the World Trade Organization and a North American Free Trade Agreement panel is the best way to resolve the dispute. Canada has already won preliminary decisions finding that the lumber duties are inconsistent with international rules that the U.S. insists all nations must follow.

Current U.S. policy is tilted towards protecting jobs based on lumber production, NAHB has argued, but is harmful to the seven million workers who are employed in housing and related industries that use softwood lumber. They outnumber lumber-producing workers by 25-to-1.

Final decisions in Canada’s legal cases are expected later this year, although delays until 2004 are possible.

For more information about lumber on the NAHB Web site, click here.
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