Canadian Lumber Update

Don Staples dstaples at
Sun Dec 14 11:52:40 EST 1997

Steve Shook responded.

One aspect you're missing concerning the predrilled holes and notched
is that many distributors and manufacturers of wood products in the US
lobbied for this tariff change. The US-Canada Lumber Agreement is only
helping, for the most part, the large US manufacturers of lumber. The
money raised goes to CANADA - not the US, and the Canadian government
redistributes this money (at least a substantial portion) to forest
industry associations. These associations use the money for product
promotion, product development, and strategic/tactical market research.
tariff raises the price of Canadian lumber, which in turn raises the
of American lumber (i.e., general market equilibrium). Higher American
lumber costs trickle down to higher stumpage prices, which is a cost
many small firms in the US cannot afford (Trickle-down economics [i.e.,
supply-side economics] does work!). When the US-Canadian Lumber
was being formed, a large number of small producers of wood products in
US were very much against it.

Steve Shook, PhD
Forest Products Marketing  (
University of Washington, Seattle

Don Staples wrote:

> From:  Texas Forestry, December 1997.
> "In February of this year, U.S. Customs took the position that 2x4 and
> 2x6 studs with predrilled holes for wiring, cables and pipes are under a
> different tariff heading and are now viewed as "builders joinery and
> carpentry".  This ruling has since been expanded to include notched
> lumber.  CAnadian producers are using this loophole by expanding exports
> of drilled and notched studs that are being shipped to the U.S.  If not
> revversed, this ruling threatens to negate the U.S./Canada Lumber
> Agreement and reintroduce unbridled subsidized imports from Canada"

Don Staples

My Ego Stroke:

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