[Congressional Record Volume 142, Number 13 (Wednesday, January 31, 1996)]
[Senate]
[Pages S570-S571]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           UNPRECEDENTED FLOOD OF SUBSIDIZED CANADIAN LUMBER

  Mr. CRAIG. Madam President, in morning business today, let me make 
several comments on an issue that is very important to this country. It 
is kind of a quiet issue that has not been prominent in the headlines 
of the Washington Post or the Washington Times; but certainly in my 
State and every timber-producing State of the Nation, it has made a 
good many headlines over the course of the last year or 16 months. And 
that is the unprecedented flood of subsidized Canadian lumber flowing 
into the continental United States and into the markets of the 48 lower 
States.
  Normally, Canada is a supplier to our market, and we need their 
timber to round out the needs of the housing industry of our country 
and the home building industry. But to meet that need and still keep 
America's work force in the forest products industry employed, Canada's 
percentage participation in our market normally is somewhere in the 
high 20's or low 30's.
  In January, this month that is now today concluding, they reached an 
all-

[[Page S571]]
time high of about 37 percent of total market share. As a result of 
that, we now see in this country about 29,000 men and women who are 
unemployed as a direct result of a major dumping effort--let me repeat, 
as a direct result of a major dumping effort--on the part of the 
Canadian forest products industry into our market.
  In my State of Idaho, just in the last few days, we have had 
announcements of another 200 men and women laid off simply because the 
price of lumber, as a result of this huge volume of subsidized lumber 
pouring in from Canada, is so low that mills cannot operate.
  Ceda-Pine Veneer north of Sandpoint, ID; Crown Pacific in Bonners 
Ferry, ID; and two Louisiana Pacific plants in Chilco and Sandpoint 
have just announced layoffs or have shut down, and the story goes on 
and on, as is true across Oregon, Washington, Idaho, and the Southeast, 
as a result of what has happened with Canadian lumber imports.
  This administration, to their credit a good many months ago became 
aggressively engaged with the forest products industry in negotiating 
with Canada in an effort to resolve this issue.
  When I say that, it is about the only good thing I am going to say, 
because as we entered into those negotiations the forest products 
industry was told by our United States Trade Representative nearly 10 
months ago that within 6 months, if the Canadians did not negotiate in 
good faith successfully, this administration would take action, and 
that action would be a temporary duty imposed until such time as a 
countervailing duty suit would be charged or the Canadians would come 
to the table with some form of a legitimate agreement to negotiate the 
differences between the two countries.
  That did not occur from the Canadians, and, as a result, finally this 
administration did say, ``We will have to bring a countervailing duty 
suit, and move toward a temporary duty.''
  In late November of this year, the Canadians finally did bring some 
proposed agreements for us--the industry and our United States Trade 
Representative--to look at to see whether they would meet the criteria 
that we were trying to advance, which was a level playing field, 
recognizing the legitimate share of the market that the Canadians could 
have without destroying our industry.
  From that point, myself, Senator Baucus, and a good many others have 
asked the United States Trade Representative to become much more 
aggressive in insisting that this problem be solved now. It was in 
December, just before we recessed for Christmas, that Mickey Kantor did 
come to the Hill and sat down with myself, Senator Baucus, five or six 
other Senators from timber-producing States, and a good many 
Representatives from the House to talk about where we were in this 
negotiation.
  At that time, Mickey Kantor said to us, and it was conveyed to the 
Canadians, that if no agreements were reached through the current 
negotiation, that on January 31, 1996, he would impose a temporary duty 
against the Canadians, and we would then move to do a variety of other 
things, including reform NAFTA's chapter 19, to consider what is called 
suspension of liquidation on Canadian imports into this country, and do 
a variety of other things that would bring about some permanency and 
stability to this problem.
  Madam President, today is January 31. Canadians are now still 
negotiating with our trade ambassador, and I do not want to say nothing 
will be resolved, but I do want to say to our trade ambassador: If 
nothing is resolved by the end of the day, it is absolutely imperative 
for this country's credibility and for this administration's 
credibility with Canada and with the industries and the work forces 
involved that we move. And that tomorrow I would expect to hear from 
our United States Trade Representative an announcement of an imposed 
temporary duty against the subsidized lumber coming out of Canada while 
these other measures are forthcoming; that the United States lumber 
industry would probably move to file a countervailing duty case, and 
that case would go forward, but would literally take months and 
potentially a year.
  But what is important here and what this administration must face is 
that it is now time to make a decision, and they must make that 
decision. If they fail to, if they bend in any form to the Canadians, 
they will send the kind of message that I believe has been sent for the 
last 6 months: We just keep on talking.
  As we keep on talking, mills are closing down in my State. As I 
mentioned, 29,000 jobs in this country are now in suspension, and men 
and women are not working as a direct result of this phenomenal flood 
of Canadian lumber coming into the market.
  It is important that this administration recognizes the high level of 
importance of the decision that they are about to make today, which is 
if the Canadians still are only talking--and, oh, are they good at 
talking--that the talking is over; that it is time for the temporary 
duty to level this playing field to send a very clear message to the 
Canadians that we mean business; that while they have a right based on 
need and supply, on the Canadian Free-Trade Agreement, and on the North 
American Free-Trade Agreement to have access to our market, they 
absolutely do not have the right to intentionally dump, and we know 
that is what they are doing at this time. They have reached out to grab 
a very large share of the U.S. market, as much as 10 percent more than 
they have ever held.

  Stocks of Canadian lumber are sitting in lumberyards across this 
country, and they are even financing it to sit there and saying, ``You 
keep it until you sell it and then you pay us.''
  I call that an aggressive antitrade effort. It is a dumping process 
and the Canadians know it. It is time they stop it, and the only way 
they will is when we speak directly and act decisively to solve this 
problem.
  Back in the early eighties, they played this game on us, and it was 
at that time in the Reagan administration that a duty was imposed and 
thousands of people went back to work in my State almost overnight as 
the markets rapidly improved. Of course, that also happened in other 
timber-producing States across the Nation.
  (Mr. ASHCROFT assumed the chair.)
  Mr. CRAIG. Mr. President, the same thing can happen in the next month 
if this administration will act. If it does not act, I say to our trade 
ambassador today, ``What are you going to say to the nearly 30,000 men 
and women that are without a job today in the timber industry simply 
because of the aggressive dumping action on the part of the 
Canadians?'' ``What are you going to say, Mr. Ambassador, and, more 
important, what are you going to say, Mr. President, about the fairness 
and equity you talk about, about the jobs you talk about creating, 
while you, by your failure to act, may well be destroying jobs?"
  In the end, when you destroy the jobs, you destroy the mills and the 
infrastructure that has been an extremely important part of the forest 
products industry of our country. As those people stand in unemployment 
lines, many of the mills are near bankruptcy today because most of them 
have operated in the red for well over a year now. It is time that 
stopped and that we bring fairness back to the marketplace. That can be 
done by a single act by a trade ambassador and a President. They know 
they can do it. We asked them to do it, and we hope it will be done 
tomorrow if the Canadians fail to come to an agreement today.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas [Mrs. Hutchison] is 
recognized.

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