The National Association of Home Builders trade group is urging the federal government not to rush into a lumber accord with Canada that could keep prices up and ultimately cause an increase in housing costs.
Jerry Howard, executive vice president and CEO for the builders’ group, said in a statement that the current framework for the agreement under consideration by the United States and Canada “could have huge long-term ramifications for the lumber market.”
According to an association announcement, “it is important that the two governments move in a deliberate manner to make sure that any final accord does not harm consumers and housing affordability at a time when the housing sector has already entered into a cooling down process.”
Canadian Prime Minister Stephen Harper is scheduled to visit the White House on July 6, and the association has warned that it will be premature to forge an agreement at that time.
The proposed deal could last for seven to nine years, and “NAHB’s analysis indicates the pact has the potential to seriously disrupt the lumber market by increasing and destabilizing prices, causing production bottlenecks as Canadian producers fight for limited market share, and instigating supply shortages as firms delay shipments in anticipation of a change in duties,” according to the trade group’s announcement.
Several members of Congress on June 12 sent a letter to President Bush stating that provisions in the proposed agreement “will contribute to volatility in the marketplace, which is an enormous problem for home builders and lumber dealers and will add burdensome costs to affordable housing for those who are least able to pay.”
Howard stated, “The best solution to resolving this dispute and to achieve free trade is for Canada to press forward with its legal cases before NAFTA and the U.S. Court of International Trade.”
Howard also stated, “We continue to urge the U.S. and Canada to address issues that affect lumber consumers as the two governments move to finalize an agreement. Second, if a deal results in new trade barriers that limit Canadian lumber shipments into the U.S., NAHB will help builders obtain a reliable supply of lumber at a reasonable cost by facilitating increased imports from Europe. And finally, NAHB is promoting the use of steel and other alternative building materials wherever practical.”