Canada Wood Imports Hurt U.S. Firms--ITC

The U.S. International Trade Commission, on a 5-0 vote, held in a preliminary decision Thursday that Canadian softwood lumber imports are undercutting U.S. sales and injuring U.S. lumber producers.

The ruling could lead to stiff duties on future imports.

The action, on a case referred to the panel by the Reagan Administration earlier this month, comes at a time of growing trade frictions between the two nations.

The decision was a victory for a U.S. industry group, the Coalition for Fair Lumber Imports, which is seeking duties of up to 27% on Canadian lumber imports.

“Until the flood of subsidized Canadian lumber is halted, the U.S. lumber industry will continue to see sawmills closed and sawmill workers forced out of their jobs,” said Stanley S. Dennison, chairman of the coalition.

U.S. lumber producers allege that the fees that Canadian federal and provincial authorities charge their Canadian counterparts for cutting timber on government-owned lands are so low that they amount to an unfair subsidy.

The lumber controversy is the most bitter trade dispute between the United States and Canada, who are each other’s most important trading partners, with two-way trade last year surpassing $122 billion.

Canadian softwood lumber imports, which include pine and other woods used primarily in home construction, totaled $2.9 billion last year.

Softwood lumber imports from Canada took 31.6% of the U.S. market in 1985, compared to 27.3% in 1981, according to an ITC staff report.

Under U.S. trade laws, the case goes next to the Commerce Department. It has until Oct. 16 to make a finding on a dollar amount of damage to U.S. lumber producers from the imports.

If the Commerce Department upholds the subsidy allegation, the case would go back to the ITC for a final ruling--and a possible levy of duties.

The action comes a week after U.S. and Canadian negotiators began talks in Washington on a pact designed to eliminate trade barriers between the two nations. The talks move to Ottawa, Canada, in July.

Last month, a U.S. decision to impose penalty duties on Canadian cedar shingles brought a retaliatory move by Canada that imposed fees on U.S. computer parts, books and magazines.

The ITC made a similar ruling in 1982 that so-called Canadian stumpage fees amounted to an indirect Canadian subsidy that harmed U.S. lumber producers. But that ruling was rejected at the time by the Commerce Department.