The Lacey Act as amended in 2008 and the antidumping complaint against imported Chinese hardwood plywood currently being investigated by the U.S. Department of Commerce are inextricably linked to a pair of initiatives championed by Sen. Ron Wyden (D-OR) five years ago.
To put things in perspective, by the summer of 2007, the housing downturn was wreaking havoc on the domestic wood industries, including logging and plywood manufacturing in Oregon. The sudden closure of mills and loss of thousands of wood-related jobs in Oregon crippled many wood-dependent communities. The crisis also brought more attention to the fact that the U.S. was importing a heckuva lot of hardwood plywood and the vast majority of it was coming from China.
Wyden did not have a magic wand to un-burst the housing bubble, but that did not stop him from using his senate seat in Washington to take a whack at stemming the flow of Chinese wood imports. To this end, Wyden committed to two major actions.
First, wielding his influence as a member of the Senate Finance Committee, Wyden encouraged the U.S. International Trade Commission to launch an investigation into possible trade abuses of imported hardwood plywood and wood flooring in July 2007. Less than one month later, Wyden introduced the “Combat Illegal Logging Act of 2007,” which sought to amend the nearly 100-year-old Lacey Act to prohibit the trade of products made with illegally logged woods.
In both cases, Wyden made it clear that one of his greatest intentions was to protect U.S. wood businesses and jobs. In introducing the Lacey Act amendment, Wyden said, “Illegal logging has been giving timber and timber product exports from countries including China an unfair advantage over U.S companies that are following the rules. This bill will help level the playing field for American manufacturers, protect the jobs of the workers they employ and address an illegal logging crisis.”
In a variation of a theme, Wyden had this to say about asking the ITC to investigate the legality of hardwood plywood. “The allegations that have been brought to my attention, particularly relating to hardwood plywood imports from China, are extremely concerning. Family wage jobs in Oregon and throughout the country are in jeopardy and I am hopeful that the results of the ITC’s investigation will make sure China starts playing by the rules.”
Congress approved amending the Lacey Act in 2008. A year later Gibson Guitar would become the Lacey Act’s poster child for the wood industry after federal agents raided its plant in Nashville and seized Madagascar ebony wood and parts.
Later in 2008, the ITC released the findings of its probe dubbed “Wood Flooring and Hardwood Plywood: Competitive Conditions Affecting the U.S. Industries.” The study found that imports of wood flooring and hardwood plywood increased from $1.2 billion in 2002 to $2.4 billion in 2007 during which time U.S. consumption of these products grew from $3.9 billion to $5.6 billion. Based on these numbers, the U.S. market share of imported wood flooring and hardwood plywood increased from 34% in 2002 to 46% in 2007.
The ITC’s report failed to offer any conclusions on whether U.S. manufacturers were at an unfair advantage as the result of illegal practices by their foreign competitors, including whether or not some Chinese hardwood plywood makers used illegally logged woods as a cost advantage.
But while the ITC did not make any recommendations of what actions the U.S. government might take to re-level the competitive playing field of the hardwood plywood and wood flooring markets, it did plant the seeds for the antidumping petition that was filed this fall by the Coalition for Fair Trade of Hardwood Plywood. As Woodworking Network reported on Nov. 9, the ITC voted unanimously for the Department of Commerce to continue its probe into allegations that Chinese hardwood plywood is being dumped at below manufacturing cost prices on the U.S. market.
Like the Lacey Act, the hardwood plywood antidumping petition has erupted into controversy, pitting domestic producers on one said against importers and users of imported wood products on the other. Two of the chief opponents of both of these battles are the Hardwood Federation, representing the interests of domestic producers, and the International Wood Products Association (IWPA), representing those that import and use imported wood products.
You can get a sense of their positions in recent Guest Blogs Woodworking Network posted, beginning with Brent McClendon, executive president of the IWPA, opining why the Lacey Act needs to be fixed, and followed by a piece penned by Dana Cole, executive director of the Hardwood Federation, asserting why the Lacey Act is good as is.
After you read their commentaries, you will easily tell which of these guest authors praises and which one curses Sen. Wyden for sticking his legislative nose into the wood products arena.
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