The U.S. Congress passed a bill yesterday that could wrap Canadian lumber imports in red tape and has the potential to impose limits beyond the restrictions already in the softwood lumber agreement.

The new legislation, added onto an unrelated farm bill by politicians sympathetic to the U.S. lumber lobby, requires importers to certify that all taxes have been paid on the lumber they receive. The bill includes enforcement measures, including intrusive company audits, penalties and fines.

This bill has the potential to add cost, and waste time. Hundreds of thousands of lumber shipments will require certification by the importer - often the same Canadian company that is exporting the wood - adding anywhere from $5 to $20 in paperwork costs per shipment.

Most of our lumber exports are a money-losing exercise already - so adding another $5-$20 a shipment is not helpful. John Allan, president of the B.C. Council of Forest Industries said, "The bill has some provisions that if there is enough political pressure, this could become fairly intrusive," referring to the power it gives the U.S. Treasury to audit companies.

President George Bush has said he will veto the farm bill, which passed Wednesday in the House of Representatives and has been sent to the Senate. But a head-count of legislators supporting it shows his veto will be over-ridden by Congress.

Washington trade lawyer Elliott Feldman said this bill "is plainly a harassment. It's bureaucratic, it requires more paperwork." He said, "the Americans have, for the first time in the 25-year-long dispute, written softwood lumber into their legislation. He described it as a flagrant breach of the 2006 softwood lumber agreement, under which Canada monitors exports and collects the appropriate tax.

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U.S. ties Canadian lumber exporters in red tape - Congress passes bill that will make life even harder for ailing forestry industry (Vancouver Sun)