Pre-drilled stud ruling under scrutiny

Home Channel News, Jan 25, 1999 by Carol Tice

WASHINGTON, D.C. -- Several groups in Canada and the United States are contemplating a challenge to the recent ruling by an International Trade Court judge that pre-drilled studs should be counted as lumber in the quotas set by the U.S. Canadian Softwood Lumber Agreement (SLA).

The groups, including the Canadian government, the Canadian Wholesaler and Remanufacturing Lumber Association and the National Lumber and Building

Material Dealers Association (NLBMDA), were waiting to see the exact language of the judge's ruling before proceeding.

"We're entitled to attempt an appeal, and we're certainly going to do that," said Allynn Howe, the NLBMDA's vp-government affairs. "It depends on how they implement the decision."

The ruling was sought by U.S. lumber producers, whose companies are organized under the Coalition for Fair Lumber Imports. John Ragosta, counsel for the Coalition, called the decision "a big Christmas present to a lot of U.S. lumber mills."

Ragosta estimated that prior to the ruling, as much as $1 million of pre-drilled studs a day were being shipped into the United States.

To offset the trading imbalance American suppliers say is caused by Canadian subsidies of its forestry industry, the SLA regulates how much lumber can be shipped from Canada without additional tariffs being paid. The tariffs range from $52 to $104 per 1,000 board feet of lumber, depending on the volume shipped.

Howe of NLBMDA expressed the concern that the ruling would encourage the Coalition to pursue additional restrictions to the SLA.

"We don't want them to try any other tricks to restrict the supply," he said. "There are other types of lumber -- notched studs, for example -- which are widely used in manufactured housing. I can't see how the courts are going to differentiate between angle cuts at the top of a framing stud and predrilled studs."

Dow Jones News Service quoted a spokesperson from the Canadian Embassy in Washington as saying that the Canadian government was "very disappointed" with the ruling, which it believes will effectively discourage production and shipment of pre-drilled studs into the United States.

Gary Donnelly, president of NLBMDA, vowed to fight for freer trade markets between the United States and Canada.

"We will continue to pursue our principles by fighting for free and open access to timber and preventing control of the market by a few wealthy timber producers and landowners," he said in a release sent to NLBMDA members.

"We will continue our efforts to prevent [the coalition] from further restricting Americans' access to quality, affordable building materials."

Others on the losing end of the ruling are setting their sights on bringing an end to the SLA altogether, when it expires in April 2001. Roslyn Nugent, president of American Bayridge, a lumber remanufacturer based in Winnipeg, said a new group is forming in Canada to pursue that goal.