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Weyco Urges Compromise In Softwood Dispute

Reasoning that current duties start," Rogel said. "There's only one against Canadian lumber are not work- way this plan can work. Both sides ing as intended, Weyerhaeuser Co. has must be willing to compromise. If offered its own solution to the soft- everyone gives a little, we can make wood trade dispute. this work for North America."

The company operates l8 softwood lumber sawmills in Canada and 2l in the U.S. "As a company with operations on both sides of the border, we're concerned that a wall is being built between the U.S. and Canada. And it's being built of 2x4s,2x6s and 2x8s," said Steven R. Rogel, chairman, president and c.e.o. of Weyerhaeuser. "The time has come to tear it down once and for a11."

In late November, Rogel traveled to Washington, D.C., to pitch a suggested compromise to the U.S. Secretary of Commerce and Canada's ambassador to the U.S.

He noted, "Clearly, the anti-dumping duty doesn't work. In fact, it's back-fired as Canadian firms have increased production to lower their unit costs. The anti-dumping duty has aggravated the over-supply situation and driven prices lower."

Rogel proposed first establishing a Canadian border tax on softwood exports (the tax would begin at 25Vo when lumber is priced at or below $225 per 1,000 bd. ft., but drop to zero when prices topped $325), ending countervailing and anti-dumping duties, and halting all petitions, litigation and appeals. Next, he said changes should be negotiated in Canadian log-pricing practices to more closely minor those in the U.S.

"We don't pretend to have all the answers, but we do offer a place to

Rogel said Weyerhaeuser would do its part, including encouraging structural changes in provincial forest poli- cies, participating in joint industry/ government efforts to set realistic policy changes for Canada, and contributing time and information to a joint U.S./Canada commission to increase trust and understanding.

Rogel acknowledged that the softwood lumber issue is a complicated (Please turn to next Page)

Weyco Urges Compromise

(Continued from previous page) one that has had difficulty attracting attention in the U.S. He said his firm would conduct a vigorous effort over the next several weeks to bring policyand decision-makers from both countries together to develop a permanent, mutually beneficial solution.

Weyerhaeuser's proposal seemed to gather a chilly reaction from both sides of the border. Canadian Trade Minister Pierre Pettigrew claimed the export tax would "legitimize" the "unfair" punitive measures already taken by the U.S.

Tembec c.e.o. Frank Dottori, cochairman of Canada's Free Trade Lumber Council, said the proposal would heavily favor U.S. producers: "Canadian companies would be permanently crippled in low markets. This looks and sounds very much like something that our U.S. competitors would favor. I don't know why Canadian companies would support such a deal. Moreover, I don't see how this proposal does anything to resolve the current situation where we pay a 27Vo duty which would be replaced by a257o export tax."

Dottori also seemed unwillins to forsake legal challenges. "I fail to see why we would do that when we just scored a big win at the WTO concerning the illegal cross-border comparisons used by the Department of Commerce to arrive at the high duties currently imposed," he said.

Also problematic was the suggestion that already-collected funds be equitably distributed between the two countries. "The notion that the U.S. protectionist Coalition would get to keep the $750 million dollars already paid in escrow by Canadian exporters is clearly unacceptable," Dottori added. "We fully expect and are entitled to get all of that money back either through successful litigation, as we did in 1994, or through negotiation as we did in 1986."

In the U.S., an American Consumers for Affordable Homes alliance called the proposal "a wrong idea at the wrong time." Spokesperson Susan Petniunas said the group "believes that if the cases are handled expeditiously in the WTO and NAFTA. decisions should be announced within the next several months, possibly as early as February or March from NAFTA. If there are no appeals to drag the process out, a resolution to this lumber war can be achieved."

SOUTHERN Prne Counc s aniong the 1 000- exh bitors at thc International Bu lders Shor,i

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