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CANADIAN LUMBER SUBSIDIES AND U.S. HOUSING PRICES

 CANADIAN LUMBER SUBSIDIES AND U.S. HOUSING PRICES
 WASHINGTON, March 5 /PRNewswire/ -- The following was released


today by the Coalition for Fair Lumber Imports:
 The U.S. Department of Commerce tomorrow will announce its determination of subsidies provided to the Canadian lumber industry, and the U.S. countervailing duties required to offset the unfair trade practices that result.
 Such countervailing duty orders are intended to level the playing field, allowing competitive U.S. mills to compete with unfairly subsidized foreign manufacturers. These subsidized Canadian lumber imports deprive U.S. lumber workers of their jobs.
 In recent weeks, the possible impact of a countervailing duty of subsidized Canadian lumber imports on the U.S. housing market has been raised by the Canadian lumber industry. Canadian lobbyists have suggested that a duty could threaten a housing recovery by adding as much as $1,000 to the cost of a new home.
 In fact, U.S. housing costs have been relatively unaffected by lumber countervailing trade measures in the past, and there is no reason to believe that would change in the future. The truth is measures to offset unfair Canadian subsidies will hardly be noticed in the U.S. housing market and in the U.S. construction industry, but will save thousands of direct U.S. lumber mill jobs.
 In 1985, before the Canada-U.S. Memorandum of Understanding (MOU), the Congressional Budget Office estimated that a 14 percent import tariff on Canadian lumber would increase the cost of a new home by no more than $300. In fact, the experience of the 15 percent export tax imposed by the MOU proved far less.
 Studies have shown that the 1986 15 percent export tax led to no more than a 7 percent increase in the ex-mill price of U.S. lumber. Even assuming the entire amount was passed on by wholesalers, the price of an average new house increased only $208. That is less than 0.2 percent and less than dollar a month on a 30-year mortgage.
 The Coalition for Fair Lumber Imports believes that is a very small price to pay and a viable alternative to the serious threat subsidized Canadian imports pose to the 15,000 U.S. lumber jobs that were created while the offsetting measures of the MOU were in force. Putting Americans out of work while importing subsidized lumber will not lead the United States out of a recession.
 A massive Canadian government/industry lobbying and public relations campaign has distorted the facts and the process of the Department of Commerce countervailing duty investigation. While Canadian officials themselves have decried Canada's "cheap wood syndrome," Canadian diplomats cry "politics" and threaten retaliation when the United States seeks to exercise its rights to offset subsidies under U.S. and international law.
 Canada can manage its timber any way it wants, but the United States has the right and the duty to seek countervailing measures when exports from a subsidized system injure U.S. workers. Canada, of course, can totally avoid any countervailing duty by adopting an open and competitive timber sales system.
 This countervailing duty case is a just and lawful U.S. legal process that should be allowed to come to its normal completion. We remain confident this process won't be sidetracked by distorted information and the threats of a trade war. Free but fair trade is the objective of the Coalition for Fair Lumber Imports.
 For additional information on the Coalition for Fair Lumber Imports and Canadian timber subsidies call 202-862-4505.
 -0- 3/5/92
 /CONTACT: John Ragosta of Dewey Ballantine, 202-862-4505, for the Coalition for Fair Lumber Imports/ CO: Coalition for Fair Lumber Imports ST: District of Columbia IN: PAP SU:


BN-BR -- AT008 -- 5417 03/05/92 11:51 EST
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Publication:PR Newswire
Date:Mar 5, 1992
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