WTO rules that distributing the duties violates international trade agreement

Consumer groups urged the Senate to support amendments to the commerce, justice, science appropriations bill (H.R. 2682) that would stop distribution of duties from U.S. treasury funds, declared illegal by the World Trade Organization (WTO), and would lead to the repeal of the so-called Byrd Amendment that provides distribution of those duties to the U.S. industry sector that brought cases to put duties in place. "Senator Charles Grassley (Iowa) has the concerns of American consumers at heart, and is seeking to enhance trade relations through his proposed amendments," said Susan Petniunas, spokesperson for the 16 member alliance of American Consumers for Affordable Homes.

"The Byrd Amendment is nothing more than a way to line the pockets of protectionist industries at the expense of consumers," she added. "It encourages industries to bring trade cases to put illegal duties in place. The first-time American homebuyer, and now more than 150,000 home owners that have to restore or rebuild their homes as a result of hurricane Katrina, will pay needless duties to lumber producers to fatten their bottom line." ACAH specifically has been opposing duties imposed on Canadian softwood lumber, essential for U.S. housing construction. The duties, imposed in 2002, now have taxed consumers by nearly $5 billion. Based on U.S. census data, this adds $1,000 to the price of a home, and is enough to price more than 300,000 families out of qualifying for a mortgage. The U.S. lost its final appeal before the North American Free Trade Agreement panel, and is required to return the duties.

The U.S. is refusing to honor the terms of NAFTA. Specifically the Grassley amendments would ban distribution of Byrd duties until the U.S. trade representative determines such distribution would be WTO compliant within 30 days. Under the current law, duties would be distributed beginning October 1. Grassley, objecting to Congress mandating outcomes from the WTO negotiations, also would strike a proposal in the bill that would require USTR to negotiate with the WTO to accept the Byrd Amendment. The U.S. can not produce enough lumber to meet its construction needs, importing about a third of its needs, mostly from Canada.

Industries that depend on lumber as an input and that oppose import restrictions include manufacturers of value-added wood products, lumber dealers, bed frames, manufactured and on-site home builders, and remodeling contractors and individuals. These industries employ more than 6.5 million workers, 25 to one when compared with those in the forestry industry. Members of ACAH include: American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP International, Consumers for World Trade, Free Trade Lumber Council, Fremont Forest Group Corporation, Furniture Retailers of America, The Home Depot, International Sleep Products Association, Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Association of Home Builders, National Black Chamber of Commerce, National Lumber and Building Material Dealers Association, National Retail Federation, Retail Industry Leaders Association, and the United States Hispanic Contractors Association.