Wood Eye!

  • by: |
  • 01/04/2007
You know the joke.

The other joke is how Senators can be for unfair trade practices (like "drugs from Canada") one day, and against them (like, for example, "lumber from Canada") the next . The difference? You guessed it -- politics.

Many thanks to the drugwonks reader who sent in the following US Senate "colloquy" between Senators Baucus and Crapo. Here's how you play: Whenever you see the words "Canadian lumber," replace them with "Canadian drugs."

(And if you'd like more Senatorial Inconsistencies, check out Senator Byron "Mr. Importation" Dorgan's statements on Canadian wheat.) Talk about Washington DC log rolling!

CANADIAN SOFTWOOD LUMBER DISPUTE -- (Senate - January 24, 2005)

Mr. CRAIG. Mr. President, I rise today to discuss the latest developments regarding the Canadian softwood lumber dispute. With yet another curious and ultimately inconsequential lumber unfair trade determination due today at the behest of a NAFTA dispute panel, it is important to place this matter in proper perspective.

Would the distinguished Senator from Montana and my colleague from Idaho engage in a colloquy with me concerning the Canadian softwood lumber dispute?

Mr. BAUCUS. I would be pleased to engage in such a colloquy.

Mr. CRAPO. I would also like to join my colleagues in a colloquy on this matter.

Mr. CRAIG. The Commerce Department has found repeatedly that Canadian lumber is subsidized and dumped. World Trade Organization and NAFTA dispute settlement panels have definitively rejected Canada's long-time arguments that its underpricing of timber cannot be deemed a subsidy. The panels have also upheld findings that Canadian lumber is unfairly dumped in the U.S. market. The International Trade Commission has found repeatedly that the unfair imports threaten our industry with harm.

President Bush was well prepared to answer the Canadian Prime Minister when they last met. The President told the Prime Minister that the problem of subsidies and dumping is caused by Canada, and the solution lies with Canada, unless Canada wants the solution to be permanent duties to offset the subsidies and the dumping. In over two decades, Canadian officials have not gotten the message, at least not in a way that takes, that this problem will not be resolved by Canada's investing hundreds of millions of dollars in legal fees on more than 30 Washington law firms to circumvent U.S. laws in countless appeals to the WTO, to NAFTA panels and to the U.S. courts--several more were filed just this month. And it will not be solved by the cottage industry that has grown up in Canada to mount PR campaigns in the United States.

The U.S. timber industry vigorously supports the administration's view that the unfair Canadian lumber problem could most appropriately and productively be resolved through negotiations--although perhaps there just ought to be permanent duties in place. But the U.S. timber industry is taking the statesmanlike high road, and I support it. Some vested interests in Canada do not see this, and prefer endless litigation, probably based on misguided advice that this will be productive from those who have made a living defending Canadian subsidies.

Mr. CRAPO. Specifically, the problem remains that the market is grossly distorted by Canadian unfair trade practices. Absent termination of or an offset to the unfair practices, the U.S. timber industry will be severely impacted by subsidized and dumped Canadian imports. We in the Congress have been assured that those responsible in the administration will not allow this further injury to our industry occur.

A solution can be either border measures imposed by the United States or Canadian border measures agreed to with the United States pending adequate Canadian timber policy reforms.

The Bush administration has concluded that the November 2004 determination of the International Trade Commission that Canadian imports threaten the U.S. industry with injury--the ``Section 129'' determination--represents an independent basis authorizing and necessitating retention of the countervailing and antidumping duty orders. The United States has faith in winning the NAFTA Extraordinary Challenge Committee proceeding on the injury issue, but even a negative outcome before the committee would not be the end of the matter.

The Bush administration has concluded that duty deposits, amounting to approximately $3 billion and growing daily, cannot and will not be returned absent a negotiated settlement between the Canadian and U.S. Governments. The panels can provide prospective but not retroactive relief. In any event, these funds are rightly due under U.S. law to the injured domestic timber industry. If there is a negotiated solution, the funds can be apportioned fairly as part of the settlement.

There is zero likelihood that the countervailing duty, antisubsidy, order will disappear absent settlement of the lumber subsidy and dumping issues, no matter how often a NAFTA panel tries to achieve this outcome.

The U.S. right to challenge Canadian log export restrictions at the WTO is clear under the WTO, and Canada is clearly in violation of its WTO obligations. I understand that the Bush administration is evaluating this issue.

I also understand that the U.S. timber industry intends to bring a constitutional challenge to NAFTA dispute settlement if the lumber dumping issue is not resolved. The future of U.S. sawmills and millworkers cannot be allowed to be ruined by outlandish decisionmaking by NAFTA dispute panels and a panelist's service with an obvious, undisclosed conflict of interest.

Mr. BAUCUS. I agree completely with my colleagues. As suggested, a NAFTA dispute panel is requiring that the Commerce Department issue today yet another revised version of the original 2002 lumber-subsidy determination. Given the panel's pattern of overreaching, it may be a relatively low subsidy estimate. If so, this will be trumpeted in headlines across Canada as a victory for Canada's lumber policies. Before all those editorial writers seize on this supposed ``victory,'' they should understand that this determination will have absolutely no legal effect. It is the Commerce Department's December 2004 findings of a subsidy of over 17 percent and dumping of 4 percent that controls. Hyping the January 24 decision as having any meaning performs a disservice to Canadian interests, which lie in a mutually beneficial negotiated settlement.

Nothing can change the facts. The Canadian provinces provide timber to their lumber companies for a fraction of its value. This harms not only U.S. sawmills, millworkers and family forest landowners, but also the Canadian forest. Environmental groups have long decried the overharvesting of timber caused by undervaluing the resource.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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