Forest ProductsTrade Highlights
Import Requirements for Solid Wood Packing Material Under Review
On January 29, 1999, the Animal Plant Health Inspection Service (APHIS) published an advanced notice of proposed rulemaking in the Federal Register. APHIS is soliciting public comment on how to amend its regulations on the importation of logs, lumber, and other unmanufactured wood articles to decrease the likelihood of exotic plant pests being introduced into the U.S. through solid wood packing materials. In recent years, the introduction of pests such as the pine shoot beetle and the Asian longhorned beetle have been linked to the importation of solid wood packing material. In a related action, effective December 17, 1998, all solid wood packing material from China, including Hong Kong, has to be treated with preservatives, heat-treated, or fumigated prior to arrival in the United States and be accompanied by a treatment certificate from one of the authorized private companies in Hong Kong or the Department for Supervision on Animals and Plants State Administration for Entry-Exit Inspection and Quarantine in China verifying the treatment has been done.
U.S. & Japan Meet to Discuss Deregulation of Housing Sector
The Housing Experts Group, one of five expert level groups under the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy, met February 17-18, 1999, in Tokyo. This marked the fourth meeting of the group since it was established in June 1997. Discussion during the two day meeting covered a wide range of housing-related issues of interest to the U.S. and Japan. Of interest to the U.S., Japan's Ministry of Construction (MOC) committed to use notice and comment procedures beginning April 1, 1999, in the preparation of all cabinet orders, ministerial orders and notifications. MOC also reported that it would have in place by May 1, 1999, performance-based building standards for three-story, multi-family and mixed-use, wood-frame construction in quasi-fire protection districts (urban areas). This latter change will represent a significant improvement over the current situation since this type of construction is only allowed through a time consuming (and often expensive) special provision of the Building Standard Law.
Softwood Lumber Dropped From Retaliation List
On December 21, 1998, the Office of the U.S. Trade Representative announced the list of products that will be subject to increased tariffs should the European Union (EU) fail to implement the recommendations of the World Trade Organization Dispute Settlement Body (DSB) concerning its regime for the importation, sale, and distribution of bananas. Several paper products are on the list, but softwood lumber was removed from the list at the request of U.S. industry. In late January, the U.S. agreed not to take any action
pending a ruling by the DSB on the level of concessions which the U.S. has proposed be suspended. The U.S. has requested authorization to suspend tariff concessions in the amount of $520 million.
Injunction Lifted on Importation of Unmanufactured Wood Products
On January 15, 1999, the U.S. District Court for the Northern District of California lifted the injunction on the importation of logs, lumber and other unmanufactured wood products which had been in place since June 5, 1997, ruling that APHIS was now in compliance with the National Environmental Policy Act. The injunction had precluded APHIS from issuing any new permits or amending any existing permits.
Norway Extends Exemption Allowing Importation of U.S. Sawn Wood
On November 9, 1998, the Norwegian Agricultural Inspection Service extended through 1999 the exemption allowing the importation of kiln-dried or heat treated coniferous lumber from Canada, China, Japan, Korea and the United States. Consignments must be accompanied by a phytosanitary certificate confirming that one of these two conditions has been met. Imports of other forms of coniferous wood (e.g. logs and air-dried lumber) from the above countries are prohibited because of concern over the pinewood nematode.
Kyrgyz Republic and Latvia Join WTO
The Kyrgyz Republic and Latvia became the 133rd and 134th counties, respectively, to join the World Trade Organization since it was established on January 1, 1995. The Kyrgyz Republic joined on December 20, 1998, and Latvia on February 10, 1999.
Wood Products Subject to Tariff Quotas/Adjustments in Korea
The Ministry of Finance and Economics has issued its 1999 list of products that are subject to tariff quotas and adjustment tariff rates. Tariff quota rates are usually set lower than the base tariff rate to foster imports of specific projects. In the wood products sector, chips, logs, and veneer (for plywood) will be subject to tariff quota rates through June 1999, at which time the rates will be reevaluated. The tariff on chips has been reduced from 2 percent to 1 percent, logs from 1-2 percent to 0 percent, and veneer (for plywood) from 5 percent to 2.5 percent. Adjustment tariff rates, on the other hand, are usually set above the base rate to discourage imports. Wood strips (non-coniferous) and plywood, veneered panels and similar laminated wood will be subject to adjustment tariff rates through December 1999. Non-coniferous wood strips will be subject to a 13 percent tariff and plywood, veneered panels and similar laminated wood be will be subject to a 15 percent tariff.
APEC Trade and Senior Officials Meet in New Zealand
APEC Trade and Senior Officials met in Wellington, New Zealand, February 1-10, 1999, to discuss implementation of the non-tariff elements, i.e., elements other than tariffs. Discussions focused on the implementation of the non-tariff elements (economic and technical cooperation, non-tariff measures, etc.) of the front eight Early Voluntary Sectoral Liberalization (EVSL) Initiatives and the development of a strategy for moving the tariff elements of the initiatives through the WTO in 1999 under the auspices of the Accelerated Tariff Liberalization ATL Initiative. (The ATL Initiative was introduced into the WTO by New Zealand, the 1999 APEC Chair, on January 27, 1999.) Trade Ministers in Kuala Lumpur, Malaysia, in November 1998, agreed to move the tariff element of these eight sectors (forest products, fishery products, chemicals, energy, environmental goods and services, gems and jewelry, medical equipments and scientific instruments, and toys) to the WTO with the goal of finalizing them in 1999. In Wellington, Japan stated that it would not participate in the element of the forest products initiative dealing with non-tariff measures (NTMs) because of the sensitivity of the sector and the APEC principle of voluntarism. Japan's refusal to participate in the NTM element was contrary to earlier statements that it would participate in all elements of the initiative except for tariffs.
Mexico Lifts Broom Retaliation
On December 31, 1998, Mexico announced (in Diario Oficial) that it was lifting its retaliation (increased tariffs) on a range of U.S. products that it had imposed in 1996 following a U.S. safeguard action against broom-corn brooms from Mexico and other countries. Effective January 1, 1999, the tariffs on certain wooden furniture were reduced from 15 percent to 6 percent and certain paper products (notebooks) from 10 percent to 4 percent, i.e., the rate under NAFTA.
China Extends Logging Ban
China's State Forestry Administration recently announced that the Government of China (GOC) will extend its logging ban to 18 provinces or two-thirds of the country. Originally implemented in August of 1998 in five provinces, the ban is an attempt to address serious problems of flooding and erosion throughout China. Already concerned that China's wood manufacturers may choose to circumvent the ban, the GOC reduced the import tariff for all logs and lumber to 0 percent in January. Hong Kong traders are quite bullish that the ban combined with exploding demand for privatized housing will fuel significantly increased demand for wood imports over the next few years.
Russia Imposes Export Tariffs on Hardwoods
O n January 4, 1999, the Government of the Russian Federation (GOR) announced export duties of 10 percent on oak, ash and beech logs, lumber and molding. The export duties are intended to level the playing field for softwood and hardwood exporters. Hardwood products return more on international markets than comparable softwood products, but cost the same to produce. In a related action, on January 5, 1999, the GOR introduced licensing requirements for all hardwood products subject to the export tariff. The licensing requirements took effect February 15, 1999. Licensing is being implemented in order to reduce and control the number of companies exporting hardwood products.