Thursday, July 13, 2006

Free Trade in Lumber

The U.S. Trade Representative is pleased to announce an important step toward free trade in lumber, if by "free trade" you mean "trade governed with an byzantine system of taxes and regulations."

Here is a quotation from the press release:
The agreement provides for unrestricted trade when prices are over $355 per Thousand Board Fee (MBF), a condition that has existed for significant portions of the past several years. When prevailing prices are less than $355 per MBF, Canadian exports will be subject to a combination of export charges or volume limits that increase in steps the lower the market drops.
One of my former CEA staffers emails me to point out the absurdity:

It's the definition of managed trade, with an export tax that kicks in when U.S. prices get too low (so U.S. consumers pay higher prices but the U.S. Treasury doesn't even get to keep the tariff revenue, which instead stays with Canada)....

This is less well-known than steel, but ranks with it as a deviation from the Administration's stated principles.