The U.S. Congress passed a bill Wednesday that could wrap lumber imports from Canada in red tape and has the potential to impose limits beyond the restrictions already in the softwood lumber agreement.
The new legislation, added onto an unrelated farm bill by politicians sympathetic to the U.S. lumber lobby, requires importers to certify that all taxes have been paid on the lumber they receive. The bill includes enforcement measures, including intrusive company audits, penalties and fines.
The bill can add cost, waste time and give the Americans "a political weapon" in the lumber trade that it didn't have before, B.C. Council of Forest Industries president John Allan said Wednesday.
"It means more reporting, more paperwork and more costs. And who at this time needs more costs?" Allan said.
Hundreds of thousands of lumber shipments will require certification by the importer -- often a U.S. subsidiary of the Canadian forest company that is exporting the wood -- adding anywhere from $5 to $20 in paperwork costs per shipment, Allan said.
"We are already losing money on every shipment so $5 to $20 a shipment is not helpful.
"The bill has some provisions that, if there is enough political pressure, this could become fairly intrusive," Allan said, referring to the power it gives the U.S. Treasury to audit companies.
President George W. Bush has said he will veto the bill, which passed Wednesday in the House of Representatives and has been sent to the Senate. But a head-count of legislators supporting it in both houses shows his veto will be over-ridden by Congress, Allan said.
Washington trade lawyer Elliott Feldman said the Americans have, for the first time in the 25-year-long dispute, written softwood lumber into their legislation. He described it as a flagrant breach of the 2006 softwood lumber agreement, under which Canada monitors exports and collects the appropriate tax.
"It gives the U.S. more authority to cover the scope of the agreement," he said, noting that if a shipment shows up at the border, the Americans can now decide whether it is in fact a product covered by the agreement. Products now entering the U.S. duty-free under the agreement could be targeted, he said. "This is plainly a harassment. It's bureaucratic, it requires more paperwork. The real question is what happens at the border [when lumber shipments arrive]."
International Trade Minister David Emerson didn't comment Monday on the U.S. bill, but the Canadian embassy in Washington is writing the U.S. administration on the issue.
The U.S. Coalition for Fair Lumber Imports hailed the legislation, saying in a news release that the Canadian government has not been collecting all the taxes required under the 2006 agreement. It alleges Canada has under-collected by $50 million since the agreement was implemented in October 2006. Coalition chair Steve Swanson said the legislation will strengthen the softwood lumber agreement "as an effective means of dealing with Canada's continued unfair trading practices in softwood lumber."
Allan dismissed the coalition's allegations, saying Ottawa collects the appropriate taxes and the U.S. customs service has documentation to prove it. The problem, he said, is that the U.S. Trade Representative -- which provides the coalition with data -- does not have access to those records because of confidentiality agreements. It's an internal U.S. problem, he said, that the Americans should work out on their own if they want accurate tallies rather than passing legislation aimed at harming Canadian producers. "The data is there, the data is given to the U.S.," he said. "We are very anxious that the U.S. government find a way to share this information across the different agencies as opposed to bringing in legislation that, in my view, attempts to amend the softwood lumber agreement."The Vancouver S un
