3 minute read
umber tariff arcuses strcng teaction
sales documents. Transportation costs on lumber coming through Canadian reload centers and Canadian wholesaler markups also could be dutiable.
Canadian companies, such as MacMillan Bloedel Limited in Vancouver, who ovn the majority of their timber may qualify for an exception. MB has filed a letter with the head of the International Trade Administration seeking exclusion on the basis that it owns 60% of its timber which is not subject to Canadian stumpage rules, according to John Howard, MB senior vice president, law and corporate affairs. Reportedly at least 20 Eastern Canadian companies have obtained exemptions from the duty. Exemptions are being considered on an individual company basis, according to the U.S. Commerce Department.
Immediate effect on the market is hard to determine since the ongoing labor dispute between the Canadian forest industry and the IWA has closed many reload centers and cut Canadian shipments to the U.S. Traders also have been waiting to see what effect the duty will have on prices. Since November and December are traditionally weak market months, it may be some time before a final price impact is felt.
Many wholesalers feel that the countervailing duty is not strong enough to hurt. They think the additional cost ($Z per thousand on $180 lumber or $30 on $200 lumber) is not enough to make any difference. Others indicate that they think Canada and the U.S. will norv work things out so that there will be no duty in the long run. Stanley Dennison of the Coalition for Fair Lumber Imports said that his group is pleased that the U.S. has recognized that Canada is subsidizing its lumber industry and that they are hoping for a negotiated settlement.
Meanwhile, Canada withdrew its f,irst offer to raise its stumpage fees. Canadian Trade Minister Pat Carney labeled the duty "deplorable, artificial and contrivedl' refusing further negotiation before Dec. 30. Until then Canada will continue to defend its position and launch a "federal and provincial diplomatic assault" on the tariff.
Story at a Glance
Preliminary duty of 150/o on incoming Canadian lumber draws wide range of responses finaldecision possible by December 30 ... negotiations may eliminate tariff completely.
Fountain Jr., Ed Fountain Lumber Co., Los Angeles, Ca. "Yet it's in a state of confusion right now. We're waiting. We're buying from hand to mouth. It has definitely affected the market, especially since over 90% of our purchases are from across the borderl'
Some retailers were livid over the duty, which they feel will increase the price of lumber and hurt both sales and profit. Frank Powers, co-owner of Seattle Lumber Co., Seattle, Wa., says the tariff hit his firm especially hard. "When it was put on all softwoods, it created a horrendous problem, especially for usl' he says. "If it were put on one or two items, such as2x4 or 2x6 spruce-pine-fir, which was the typical lumber coming out of Canada creating this sawmill problem, well that's one thing. But they put it on all softwoods, cedar, spruce, everything we sell out of British Columbia. It's just a tremendous problem for us I '
"It'll raise prices, but it won't solve the probleml' he concludes.
It is difficult to find many who are pleased with the U.S. ruling. Dave Gambee of Western International Forest Products, Inc., Fortland, Or., considers the tariff "an annoyancel' He explains, "It's a problem that's much too big to be solved by this band aid approach. It goes back so far. It's not just stumpage. It's the way we have been doing things for years and the way Canada has been doing things for yearsl'
He's not the only one who wishes it would just go away. "I'm very surprised that the government went ahead and did it, especially this administration, but I guess this is a political yearl'says Ed
The North American Wholesale Lumber Association also sees this universal duty on all Canadian species, products and producers as leading to a loss of market share to competitive products. Attempts at excluding certain species. items and producers who don't rely on government stumpage, its board of directors claims, will lead to further inequities on both sides ofthe border. The association is firmly against inviting trade retaliation by the States' biggest trading partner and urges a speedy return to negotiations between American and Canadian producers and governments.
Regardless ofhow they feel about it, you can be sure that retailers, wholesalers and producers on both sides ofthe border are keeping a wary eye on the calendar and hoping that a truce is reached before the spring buying season is in full swing.
INCE geography, not national borders, defines western wood species, products from 12 ofthe western United States and two Canadian provinces qualify commercially as western woods.
In the United States. 17 species growing in an area extending east and west from the Black Hills of South Dakota to the Pacific Ocean and from the Mexican border on the south to the Canadian border on the north are marketed as western woods. Known as the U.S. Western Lumber Producing Region, this area includes Washington, Oregon, California, Arizona. New Mexico. Colorado. Utah. Nevada, Idaho, Montana, Wyoming and a portion of South Dakota. Included within the region are the Coastal Region of the Pacific Northwest, the California Redwood Region and the Inland Region.
This area covers nearly 30% ofthe U.S. and contains about 1,364 billion board feet of commercial softwood saw timber. In 1985, it produced 56% of the annual U.S. softwood output not including redwood. The addition of redwood production frgures raises the totalto 6l% The area is considered the world's largest lumber producing area.
Wood from this grcxving region is identified not only by correct botanical name
