NLBMDA advocates for softwood agreement
Over 170 members of the House of Representatives sent a letter on June 12 to Commerce Secretary Wilbur Ross and Ambassador Robert Lighthizer, the U.S. Trade Representative, asking that the United States (U.S.) return to the negotiating table with Canada and redouble efforts to reach a new softwood lumber agreement. The letter followed a concerted effort by NLBMDA members to build support for the letter, and comes and as lumber prices have reached record highs.
NLBMDA spearheaded efforts to amass congressional support for the letter and was helped by the National Association of Home Builders (NAHB). At the NLBMDA Spring Meeting and Legislative Conference in March, dealers met with their lawmakers regarding the letter.
In a follow-up to the House letter, David MacNaughton, Canada's Ambassador to the U.S., wrote a letter to the House lawmakers that requested that the U.S. return to the negotiating table. Ambassador MacNaughton stated that Canada remains "open to talks for a new softwood lumber agreement that include a reasonable approach on the part of U.S. industry."
Lumber prices remain at or near record highs and have increased attention in the dispute. The Random Lengths Framing Lumber Compose Prices has increased 44 percent over the past year. In addition, the Random Lengths Structural Panel Composite Price has increased 41 percent over the past year. Moreover, since the Department of Commerce investigation started in December 2016, domestic softwood lumber prices have increased 30 percent according to the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics (BLS). Oriented strandboard (OSB) prices have increased 32 percent over the same period according to the PPI.
This week NLBMDA staff met with officials from the Canadian province of Alberta regarding the dispute. NLBMDA is exploring next steps following the House letter, including building support for a Senate letter asking the Administration to return to the negotiating table with Canada and reach a new agreement. The ongoing dispute will be a focal point for lumber dealers when they meet with federal lawmakers during the August recess.
The decision last year by the U.S. International Trade Commission (ITC) affirmed combined antidumping duties (AD) and countervailing duties (CVD) of 20 percent for most Canadian lumber producers importing to the U.S. For the five companies (Canfor, J.D. Irving, Resolute, Tolko, and West Fraser) that were directly involved in the investigation, the rates vary between 9 percent and 23 percent. Duties do not apply to softwood lumber harvested in the Atlantic Provinces of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
More recently, U.S. Customs and Border Protection (CBP) shocked the cedar market with the March 15 announcement that the softwood lumber duties would apply for shakes and shingles imported from Canada. The Shake and Shingle Alliance (SSA), made up of members of the Cedar Shake and Shingles Bureau and other manufacturers, have engaged legal counsel in the hopes of having duties not apply to Canadian shakes and shingles. NLBMDA has spoken with SSA’s legal counsel and is monitoring this recent development in the trade dispute.
Notably, Canada has responded on two fronts in the dispute. First, it has requested a binational panel review of the AD/CVD determination as provided under Chapter 19 of the North American Free Trade Agreement (NAFTA). Second, at the Canadian government’s request, the World Trade Organization (WTO) has created dispute settlement panels to review the softwood lumber duties.
Canada has expressed confidence that they will prevail in the NAFTA dispute settlement process, and views the continuation of NAFTA Chapter 19 panels as essential to any updated version of the trilateral trade pact. Despite extensive talks to renegotiate NAFTA, the three countries have not reached a new deal and the deadline has passed for Congress to approve a renegotiated agreement this year. That means any NAFTA deal will be approved in 2019 at the earliest.
In 2016, softwood lumber imports from Canada to the U.S. were valued at an estimated $5.66 billion. Enforcement of U.S. trade law is a prime focus of the Trump Administration. The Commerce Department has initiated 118 new antidumping and countervailing duty investigations since the beginning of the Trump Administration. This is 59 percent more than the 74 initiations in the last 508 days of the Obama administration.
NLBMDA continues to explore avenues that build positive momentum for a long-term resolution to the U.S. – Canada softwood lumber dispute that brings stability and predictability to pricing and availability without the imposition of duties.
Ben Gann is VP of legislative and political affairs for the National Lumber and Building Material Dealers Association. He can be reached at [email protected].
NLBMDA spearheaded efforts to amass congressional support for the letter and was helped by the National Association of Home Builders (NAHB). At the NLBMDA Spring Meeting and Legislative Conference in March, dealers met with their lawmakers regarding the letter.
In a follow-up to the House letter, David MacNaughton, Canada's Ambassador to the U.S., wrote a letter to the House lawmakers that requested that the U.S. return to the negotiating table. Ambassador MacNaughton stated that Canada remains "open to talks for a new softwood lumber agreement that include a reasonable approach on the part of U.S. industry."
Lumber prices remain at or near record highs and have increased attention in the dispute. The Random Lengths Framing Lumber Compose Prices has increased 44 percent over the past year. In addition, the Random Lengths Structural Panel Composite Price has increased 41 percent over the past year. Moreover, since the Department of Commerce investigation started in December 2016, domestic softwood lumber prices have increased 30 percent according to the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics (BLS). Oriented strandboard (OSB) prices have increased 32 percent over the same period according to the PPI.
This week NLBMDA staff met with officials from the Canadian province of Alberta regarding the dispute. NLBMDA is exploring next steps following the House letter, including building support for a Senate letter asking the Administration to return to the negotiating table with Canada and reach a new agreement. The ongoing dispute will be a focal point for lumber dealers when they meet with federal lawmakers during the August recess.
The decision last year by the U.S. International Trade Commission (ITC) affirmed combined antidumping duties (AD) and countervailing duties (CVD) of 20 percent for most Canadian lumber producers importing to the U.S. For the five companies (Canfor, J.D. Irving, Resolute, Tolko, and West Fraser) that were directly involved in the investigation, the rates vary between 9 percent and 23 percent. Duties do not apply to softwood lumber harvested in the Atlantic Provinces of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
More recently, U.S. Customs and Border Protection (CBP) shocked the cedar market with the March 15 announcement that the softwood lumber duties would apply for shakes and shingles imported from Canada. The Shake and Shingle Alliance (SSA), made up of members of the Cedar Shake and Shingles Bureau and other manufacturers, have engaged legal counsel in the hopes of having duties not apply to Canadian shakes and shingles. NLBMDA has spoken with SSA’s legal counsel and is monitoring this recent development in the trade dispute.
Notably, Canada has responded on two fronts in the dispute. First, it has requested a binational panel review of the AD/CVD determination as provided under Chapter 19 of the North American Free Trade Agreement (NAFTA). Second, at the Canadian government’s request, the World Trade Organization (WTO) has created dispute settlement panels to review the softwood lumber duties.
Canada has expressed confidence that they will prevail in the NAFTA dispute settlement process, and views the continuation of NAFTA Chapter 19 panels as essential to any updated version of the trilateral trade pact. Despite extensive talks to renegotiate NAFTA, the three countries have not reached a new deal and the deadline has passed for Congress to approve a renegotiated agreement this year. That means any NAFTA deal will be approved in 2019 at the earliest.
In 2016, softwood lumber imports from Canada to the U.S. were valued at an estimated $5.66 billion. Enforcement of U.S. trade law is a prime focus of the Trump Administration. The Commerce Department has initiated 118 new antidumping and countervailing duty investigations since the beginning of the Trump Administration. This is 59 percent more than the 74 initiations in the last 508 days of the Obama administration.
NLBMDA continues to explore avenues that build positive momentum for a long-term resolution to the U.S. – Canada softwood lumber dispute that brings stability and predictability to pricing and availability without the imposition of duties.
Ben Gann is VP of legislative and political affairs for the National Lumber and Building Material Dealers Association. He can be reached at [email protected].