WASHINGTON — The U.S. Commerce Department announced it would comply with a NAFTA panel’s order to cut a 16 percent duty on Canadian softwood lumber imports — for now.

Even though the Bush Administration still strongly disagrees with the repeated NAFTA rulings in Canada’s favor, it will comply, Commerce Secretary Carlos Gutierrez said yesterday. “We have serious concerns about the panel’s decision. However, consistent with our NAFTA obligations, we have complied with the panel’s instructions,” Gutierrez said in a press release.

The ruling effectively means that the Americans would reduce duties from about 16 percent to less than one per cent. Separate antidumping tariffs averaging about 4 percent will not be affected.

While protectionists oppose the move to lift
softwood tariffs, US consumer groups applauded the move

However, the government says it’s asking for clarification of the ruling — meaning the duties on Canadian imports can remain in place for another 45 days. Officials also added they have the right to appeal the ruling.

The two counties have been at odds over the softwood issue for years. Canada says the duties are in violation of the free trade agreement. The U.S. has argued that Canadian softwood is subsidized because it’s cut on Crown timberland, while U.S. softwood is sawed privately, placing it at a competitive disadvantage.

Canada accounts for about one-third of the U.S. supply of softwood, used mainly in homebuilding.

As expected, U.S. protectionist industry groups decried the move. However, consumer commended the Department of Commerce for “finally doing the honorable and right thing in recalculating lumber duties as directed.”

American Consumers for Affordable Homes (ACAH), representing more than 95 percent of lumber consumption in the U.S., said such duties only punish consumers. “These duties on Canadian softwood lumber increase the cost of a new home by at least $1,000, pricing more than 300,000 families out of mortgage eligibility and home ownership,” said Susan Petniunas, spokesperson for ACAH.

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, remodeling contractors, mattress and box springs manufacturers, and individuals, says ACAH.

— with files from Associated Press