Canadian lumber tariff rcaction

!f EACTION in the industry to the rl temporary countervailing duty of 15 % imposed on Canadian lumber shipped into the United States ranges from pleased to definitely unhappy to hopping mad.

Announced on Oct. 16, the final deadline for a preliminary decision, the ruling reverses an earlier decision made in 1983 that Canadian lumber was not subsidized. Months of study by the U.S. Commerce Department including hearing testimony by both those in favor ofthe duty and those opposed to it preceded the announcement ofthe current duty. As a preliminary judgment, it will be in effect ' for 45 days. During this time the U.S. and Canada will have an opportunity to negotiate a settlement on trade which could keep the present 15% duty, increase it, lessen it or eliminate it. Deadline for this action is Dec. 30.

The Coalition for Fair Lumber Imports, a group active in promoting the belief that the Canadian stumpage policies are unfair, would like to have seen an even higher duty imposed. They have maintained that the provincial government policies of lowering stumpage fees when prices fall represents a huge subsidy to the Canadian mills. As a result, they say, Canadian mills have increased their share of the U.S. market to a third from less than a quarter fewer than 10 years ago.

Implementation of the duty has caused confusion in the marketplace. All Canadian lumber coming into the U.S. now has to be accompanied by bonds or cash deposits equal to the duty. These will be held by the U.S. Customs Service until the final ruling. At that time they will be returned or retained, depending upon the final decision. The duty in most cases is applied to the f.o.b. mill price of the shipment if it is separately identified on the sales documents. Transportation costs on lumber coming through Canadian reload centers and Canadian wholesaler markups also could be dutiable.

Canadian companies, such as Mac-

Millan Bloedel Limited in Vancouver, who own the majority of their timber may qualify for an exception. MB has filed a letter with the head of the International Trade Administration seeking exclusion on the basis that it orvns 60% of is timber which is not subject to Canadian stumpage rules, according to John Houard, MB senior vice president, law and corporate affairs. Reportedly at least 20 Eastern Canadian companies have obtained exemptions from the duty. Exemptions are being considered on an individual company basis, according to the U.S. Commerce Department.

Immediate effect on the market is hard to determine since the ongoing labor dispute berween the Canadian forest industry and the IWA has closed many reload centers and cut Canadian shipments to the U.S. Traders also have been waiting to see what effect the duty will have on prices. Since November and December are traditionally weak market months, it may be some time before a final price impact is felt.

Many wholesalers feel that the countervailing duty is not strong enough to hurt. They think the additional cost ($27 per thousand on $180 lumber or $30 on $200 lumber) is not enough to make any difference. Others indicate that they think Canada and the U.S. will nor,v work things out so that there will be no duty in the