Furniture Retailers, Importers, Join U.S. Consumer Groups Battling 28 Percent Duties on Canadian Lumber Imports

Furniture World Magazine

The Furniture Retailers of America (FRA), a coalition comprised of large and small retail companies throughout the U.S. formed to protect its customers from a protectionist anti-dumping petition against China, has joined with the American Consumers for Affordable Homes (ACAH) to fight against onerous trade duties as high as 28 percent imposed against Canadian softwood lumber used by some of its members in consumer furniture products. FRA members include such well-known and respected companies as: J.C. Penney Company, Inc., Rooms To Go, Haverty Furniture Cos., Crate & Barrel, The Bombay Company, City Furniture, Slumberland, as well as Leath Furniture, HOM, Wickes, Harlem and Ashley Furniture, among many more. ACAH is a group of 17 national trade associations and companies that represent 95 percent of the U.S. consumption of lumber. Among its members are the National Homebuilders Association, Consumers for World Trade, National Lumber and Building Material Dealers Association, Manufactured Housing Institute, and the Home Depot. "Like ACAH, FRA believes that trade laws should not be abused to the detriment of American consumers who will face price disruptions, fewer choices, and risk quality on bedroom furniture," said Michael Veitenheimer, FRA spokesperson and Vice President and Counsel of The Bombay Company. Both organizations are fighting protectionist U.S. companies that have filed petitions with the Department of Commerce to impose duties on imports. ACAH is fighting domestic lumber producers International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland, and a group of southern land owners. FRA was formed to protect customers from a group of domestic furniture manufacturers seeking to restrict consumer access to high quality wooden bedroom furniture by filing an anti-dumping petition against China with the U.S. International Trade Commission. FRA represents well over 3,500 retail outlets and 200,000 associates/employees nationwide. In January the U.S. International Trade Commission (ITC), in a preliminary determination, ruled that there is a reasonable indication of "material injury" as a result of wooden bedroom imports from China. Subsequently, on June 18, 2004 the Department of Commerce (DOC) announced preliminary margins ranging from 4.90 percent to 198.08. "For some, these duties are a disaster," said Veitenheimer. "For others, the rates are cumbersome. In any event, they are unjustified and will do nothing to help the domestic furniture industry. But without the strong opposition FRA helped to create and support, the margins could have been significantly higher; the rates are nowhere near those requested by the petitioners (i.e. between 150% and 440%). We are determined to defeat this petition at the ITC." ACAH is fighting to achieve free trade between the U.S. and Canada in lumber, noting that: "It is foolish to put a federally imposed sales tax of 28 percent on each dollar's worth of lumber imported from Canada when we can not come close to meeting the demand for lumber through domestic production," said Susan Petniunas, spokesperson for ACAH. The U.S. is dependent on imports to supply a third of the lumber required in our housing industry. At nearly $500 per thousand board feet for 2 x 4s, lumber prices are at record levels, according to industry watchers. This is partly due to the devastation by Hurricane Charley in Florida and to onerous lumber tariffs imposed by the U.S. government. Since petitions were filed against Canadian producers, resulting in only a "threat" of injury to domestic lumber companies, Canada has won most of the major issues in the dispute before World Trade Organization and North American Free Trade Agreement panels. The Commerce Department has twice been forced to recalculate CVD duties, and has proposed reducing them substantially, though this has yet to be felt at the border, due to the review process. The ITC has also been directed to reevaluate its determination of threat of injury. Trade observers in both the U.S. and Canada believe that the recalculations will eventually show that only deminimis duty rates are justified, and that the ITC cannot support its determination of a threat to the U.S. producers, and will be ordered to revoke its finding. This decision could come in the next month, but would be subjected to appeals that could drag the case on into early 2005. The ITC will make a final determination in late December on whether the U.S. furniture industry has been injured by Chinese imports. The cost of current softwood lumber duties, along with the current cost of lumber, eliminate home purchases by as many as 300,000 families who can't qualify for a loan. More than 100 bi-partisan members of the U.S. Senate and House of Representatives have called on the Bush administration over the past three years to end its challenge to Canada, and not impose any export taxes, duties, or quotas on lumber that are essential to our housing market and our economy. New resolutions were introduced in the current session of Congress (S. Con. Res. 22 and H. Con. Res. 197), urging free trade in lumber between the U.S. and Canada. Industries that depend on lumber as an input and that oppose import restrictions include manufacturers of value-added wood products, lumber dealers, manufactured and on-site home builders, and remodeling contractors, retailers of beds and bedroom suites, and individuals. These industries employ more than 6.5 million workers, 25 to one when compared with those in the forestry industry. ACAH represents more than 95 percent of U.S. lumber consumption. 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.