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U.S. Settles Lumber Dispute With Canada

Old 04-27-06, 10:17 AM
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U.S. Settles Lumber Dispute With Canada

http://news.yahoo.com/s/ap/20060427/...lumber_dispute

The Bush administration announced Thursday that it had reached a tentative agreement to settle a bitter three-decade-long battle with Canada over softwood lumber.

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blah blah blah
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According to the reports, Canada would impose an export tax starting when North American lumber prices fall below $360 per 1,000 board feet of softwood lumber. The levy could go as high as 15 percent when the price goes below $310 per 1,000 board feet. This Canadian tax would serve to drive up the cost of lumber exported to the United States, reducing competitive pressures on U.S. producers while driving up the cost of lumber for American consumers.


YEAH! we get to pay more for wood than we have to!
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Old 04-27-06, 10:21 AM
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Clearly an attempt to boost the profits of Bush's lumber company.

"You wanna buy some wood?" Hmph. Indeed.
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Old 04-27-06, 10:29 AM
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Thank God this dispute has been settled. It was weighing on my mind for years.
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Old 04-27-06, 10:30 AM
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Heard on CBC News this morning that some of the provinces are quite opposed to the agreement. It may very well not pass in Canada.
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Old 04-27-06, 10:47 AM
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Originally Posted by OldDude
Heard on CBC News this morning that some of the provinces are quite opposed to the agreement. It may very well not pass in Canada.
I really don't think it will. There's a lot of bitching on local talk radio about it. We'll only be getting 78% of the illegally collected tariffs back and there will still be a tax! Just the issue that we've won over and over for....seems stupid to agree to this....for both sides, actually.
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Old 04-27-06, 10:50 AM
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Does NAFTA not play into this?
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Old 04-27-06, 10:59 AM
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Oops... Time to tax Home Depot and Lowes.
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Old 04-27-06, 11:19 AM
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It's not too late for a preemptive strike.
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Old 04-27-06, 11:20 AM
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The French parts of Canada should have been wiped out years ago.
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Old 04-27-06, 11:35 AM
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That's it bhk, now you've done it! Paging eXentris to thread 463569. He will not let this wanton Canada bashing go unanswered.
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Old 04-27-06, 11:53 AM
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Originally Posted by VinVega
He will not let this wanton Canada bashing go unanswered.
<img src="http://www.sfist.com/archives/bring.jpg" align=right width=100><img src="http://www.liquorsnob.com/George-Bush-Toast.jpg" width=150>
"Bring it on."
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Old 04-27-06, 02:47 PM
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Well this really sucks. More trade barriers. Ugh!
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Old 04-27-06, 02:57 PM
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Originally Posted by grundle
Well this really sucks. More trade barriers. Ugh!
Yeah, but at least it didn't come to war. Canada's brinkmanship policies are really getting out of control.
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Old 04-27-06, 04:35 PM
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So anyone know about NAFTA and why it doesn't apply to this?
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Old 04-27-06, 04:40 PM
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Originally Posted by kvrdave
So anyone know about NAFTA and why it doesn't apply to this?
don't know.

try here: http://en.wikipedia.org/wiki/U.S.-Ca...lumber_dispute
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Old 04-27-06, 04:40 PM
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oh... we dont follow it:

On August 15, 2005, the U.S. said it would not abide by the NAFTA decision because the Section 129 determination superseded the decision being reviewed by the NAFTA panel.
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Old 04-27-06, 05:07 PM
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Originally Posted by solipsta
I really don't think it will. There's a lot of bitching on local talk radio about it. We'll only be getting 78% of the illegally collected tariffs back and there will still be a tax! Just the issue that we've won over and over for....seems stupid to agree to this....for both sides, actually.
Yeah that's just stupid. The US lost every damn hearing (NAFTA, WTO) on this issue since god knows when and just went on imposing that illegal tariff as if nothing happened, arguing that they wanted a negotiated settlement. There's nothing to negotiate, you lost.
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Old 04-27-06, 09:29 PM
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The US lost every damn hearing (NAFTA, WTO) on this issue since god knows
Originally Posted by eXcentris
when
Didn't the U.S. win some cases at the WTO level?
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Old 04-27-06, 10:02 PM
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Originally Posted by DivxGuy
Didn't the U.S. win some cases at the WTO level?
NAFTA rulings have always backed Canada. The WTO rulings mostly went in favor of Canada except one or two which stated that import duties were not illegal but were too high. This was in 2005. A couple of weeks ago, the WTO struck down that earlier ruling that supported US measures on Canadian softwood lumber imports. Furhermore, NAFTA states very clearly that in the case of a conflict between NAFTA and the WTO, NAFTA prevails.
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Old 04-27-06, 11:40 PM
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Originally Posted by Venusian
YEAH! we get to pay more for wood than we have to!
Actually the current tarrifs are at around 10-15% and under the agreement, at current market conditions, the markup would be 5%.
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Old 04-27-06, 11:44 PM
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Originally Posted by eXcentris
Yeah that's just stupid. The US lost every damn hearing (NAFTA, WTO) on this issue since god knows when and just went on imposing that illegal tariff as if nothing happened, arguing that they wanted a negotiated settlement. There's nothing to negotiate, you lost.
Okay, I think I am not understanding this so help me out. It was my understanding that NAFTA meant free trade in North America. Doesn't that mean that there should be no tarrifs by either country for either imports or exports? Or was it just a fancy name for an agreement filled with exceptions? I honestly don't know.
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Old 04-28-06, 08:15 AM
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Originally Posted by kvrdave
It was my understanding that NAFTA meant free trade in North America. Doesn't that mean that there should be no tarrifs by either country for either imports or exports? Or was it just a fancy name for an agreement filled with exceptions? I honestly don't know.
I don't really know either. Since it was crafted by politicians, I'm guessing "B."

Of course, if the "F" in NAFTA meant free, my view is I should be able to cross the border, buy as much as I want, and bring it home, too. Can't do that either. There are still dollar limits and it all has to be declared.

It's probably a crock.
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Old 04-28-06, 09:16 AM
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Originally Posted by kvrdave
Okay, I think I am not understanding this so help me out. It was my understanding that NAFTA meant free trade in North America. Doesn't that mean that there should be no tarrifs by either country for either imports or exports? Or was it just a fancy name for an agreement filled with exceptions? I honestly don't know.
The problem is that the Canadian gov actually grows most of the lumber in Canada. They then sell the harvesting rights to Canadian companies at below market prices, in effect subsudizing the industry. In the US those rights are auctioned off in the free market.

NAFTA allows a member to protect it's domestic market from subsidized imports. Both the WTO and NAFTA have been fairly consistent in ruling that Canada subsidizes lumber, but have generally ruled with Canada on the degree (if any) that it effects the US market and the amount of US import tariffs.
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Old 04-28-06, 12:38 PM
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ok hang on everyone this can get a little technical.

yes NAFTA eliminates the standard duty and fees. Like for instance, finished automobiles have a 2.5% duty normally. Under NAFTA (and its predecessors which were essentially for the auto industry) this is changed to free. There is also normally a merchandise processing fee (MPF) of .21% (min $25 max $480), but under NAFTA this is also waived. Many other trade agreements still have MPF and its friend HMF (harbor maintenance fee .125% i think).

However, whats happened in the case of Softwood Lumber and many other commodities is a special case that goes outside of the normal NAFTA rules. This isnt anything unique, and most countries do this.

There are 2 main special programs: Anti-dumping (AD) and Countervailing (CV).

AD happens when a company in County B sells Commodity X in Country A at less than the actual domestic value. Companies normally do this to bleed the competition. So when a company files a formal complaint, Dept of Commerce investigates and if they find dumping, then can then assess a special duty on the goods from that country (or even specific companies if some are doing it or not, or some worse than others etc)

CV happens when a company in Country B is given a government subsidy to make Commodity X. This creates an unfair environment for companies in Country A who do not get such subsidies. So a special CV duty is assessed that is equivalent to the subsidy and evens the playing field. From what I understand a main problem is that the papertrail for Canadian lumber is often sketchy and its hard to tell where the wood actually came from, who cut it processed it, and what they actually received from the govt, since the company bringing it across the border and legally responsible for importation is often a third party.

In extreme cases (ive heard Chinese Garlic is one) the AD rates are over 100%! So you pay more in duty than you actually paid for the goods!

I hope this helps
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Old 04-28-06, 09:00 PM
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Originally Posted by OldDude
I don't really know either. Since it was crafted by politicians, I'm guessing "B."

Of course, if the "F" in NAFTA meant free, my view is I should be able to cross the border, buy as much as I want, and bring it home, too. Can't do that either. There are still dollar limits and it all has to be declared.
Free trade in this case means freedom from protective measures like tariffs, not regular consumption taxes.

You're probably free to bring in as much as you like, but you'll be subject to sales tax if you exceed your duty-free limit.
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