Hearing of Senate Commerce, Science and Transportation on Softwood Lumber

Hearing of Senate Commerce, Science and Transportation on Softwood Lumber

SNOWE PRESSES FOR EQUITABLE SOFTWOOD LUMBER TRADE WITH CANADA AT SENATE HEARING TODAY

Senate Commerce Subcommittee Reviews Economic Impact of the Canadian Softwood Lumber Dispute on U.S. Industries

WASHINGTON, D.C. - At a Senate Commerce Committee hearing today, U.S. Senator Olympia J. Snowe (R-Maine) today renewed her call for vigilance by the U.S. government to ensure that they use every tool available to fight unfair Canadian softwood lumber subsidies. Snowe believes that with a newly elected Canadian government, the United States should recommit itself to resolving this longstanding dispute that threatens the U.S. softwood lumber industry in Maine and throughout America. Appearing before the committee today were representatives from the U.S. Department of Commerce and the United States Trade Representative.

Snowe delivered the following statement today:

The history of the logging and timber industry in Maine is as vast as the forests on which it relies. Logging in Maine began in the early 1600's when English explorers first cut trees on Monhegan Island. By the mid 1830s, Bangor was home to more than 300 sawmills, giving the city the well-earned title "Lumber Capital of the World."

Conifer and hardwood forests still cover 90 percent of the state to this day. The paper and lumber industry accounts for one-third of the manufacturing jobs in Maine and 43 percent of the state's manufactured product. The industry employs nearly 30,000 workers with an annual payroll over $1 billion. This is nowhere near what it once was but it's still a proud industry stemming from a proud history, and I believe we have an obligation to do everything under our power to keep it that way.

This nation's lumber industry has been embroiled in a bitter fight for fairness for over two decades. In the past, our government has been helpful to the industry. But our government's political will is being tested now and we need to be assured that it will remain a friend of U.S. softwood lumber.

There is little doubt that the Canadian lumber industry is unfairly subsidized by its federal and provincial governments. In Canada, the price to harvest timber is set administratively rather than through a competitive auction as is often the practice in the United States. Comparing different species of timber in Canada with their U.S. counterparts leaves little doubt that Canadian timber is significantly cheaper than comparative U.S. timber. And so under US trade remedy laws, foreign goods benefiting from subsidies can be subject to a countervailing duty tariff to offset the magnitude of the subsidy.

Yet because we are a party to NAFTA, our own domestic laws and legal procedures can be trumped by bi-national panels. Despite the fact that these panels have affirmed Canada's subsidization, they continue to place themselves above U.S. law. One recent NAFTA Chapter 19 panel invalidated an ITC determination that the U.S. lumber industry was under a threat of injury because of Canadian imports. In addition, the panel took the audacious step of refusing to allow the International Trade Commission (ITC) to reopen the administrative record and in fact ordered it to issue a negative determination after it reached another affirmative determination based on the existing record.

And in October of last year, yet another NAFTA panel issued a decision requiring Commerce to re-calculate the amount of its countervailing duties. The Department requested more time before making its determination and at that time I was told personally by Deputy Secretary Sampson that the government would use every tool in its arsenal to continue the fight. One month later, despite a letter from several Senators urging the Department to implement the NAFTA panel ruling in a way that preserved current duties, the Department instead recalculated the duties at a de minimus level - the worst case scenario.

I need to know now that what I was told in person - that the Department will use every tool in its arsenal to fight for what's fair - will indeed take place. Has the Extraordinary Challenge Committee process been exhausted? Have diplomatic efforts been exhausted? Has the NAFTA Chapter 19 process been sufficiently challenged? Has every tool indeed been used?

This industry has been faced with repeated affirmations of Canada's subsidized system, questionable - at best - NAFTA panel decisions, and a federal government who too often treats it like a mere irritant.

We are here today to make sure the federal government knows that we are watching. There is now a new government in Canada and we are watching to see how our own government uses this opportunity to re-approach our northern neighbors and re-invest itself in the fight. And we are watching to be sure that they do what they say they will do - use every tool in the arsenal and do what's right.

http://snowe.senate.gov/news.htm