Tentative Lumber Agreement Would Destabilize U.S. Lumber Market.

OTTAWA, July 31 /PRNewswire/ -- A managed trade agreement to end the dispute between Canada and the U.S. over lumber duties that was initialed by both sides in Geneva earlier this month raises serious concerns for the nation's home builders, Barry Rutenberg, a member of the NAHB Executive Committee and a builder from Gainesville, Fla., told the International Trade Committee of the House of Commons today.

Following up on testimony he provided on June 19, Rutenberg indicated that the shortcomings of the politically driven agreement have only become more apparent in recent weeks.

Rather than producing stability and predictability, he said, the agreement "would disrupt the market" by imposing border taxes and quotas designed to constrain Canadian lumber imports into the U.S. "Under the agreement, the most severe penalties would apply whenever prices are below $315 per 1,000 board feet," Rutenberg said. The price reported by Random Lengths last Friday was $302, and if the agreement were in force today it would be exerting upward pressure on lumber prices at a time when the market is pushing them down.

Rutenberg also indicated that the agreement was a matter of bad timing, with Ottawa nearing a satisfactory resolution to its quest for free lumber trade through the North American Free Trade Agreement process, the World Trade Organization and the U.S. Court of International Trade, an effort that has brought Canada a series of judicial victories.

"With regard to the litigation, the suspension of the Extraordinary Challenge has blocked the near-certain confirmation of the NAFTA rulings against the subsidy allegations," he said. "But two key decisions by the U.S. Court of International Trade have placed ultimate victory within reach. Any legal claim by the U.S. lumber coalition to the duties has been eliminated, and a three-judge panel has unanimously found that the ploy used by the U.S. government to avoid implementing ...