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China Driving U.S. Plywood Makers Out Of Business

Thu, 05/31/2007 - 6:10am
Jeff Barnard, AP Environmental Writer
MEDFORD, Ore. (AP) - U.S. manufacturers of hardwood plywood used in kitchen cabinets and furniture testified Wednesday they are in danger of being driven out of business by Chinese panels that are not only cheaper, but also often made of toxic glue and timber harvested illegally.
 
Speaking before the Senate Subcommittee on Public Lands and Forests, Joseph H. Gonyea III, chief operating officer of Timber Products Co., and Phill Guay, vice president of Columbia Forest Products, called for tougher enforcement of trade laws and closer inspection of Chinese plywood coming into the United States.
 
''The continued survival of our industry is at risk,'' Gonyea said.
 
In the first quarter of 2007, imports of Chinese hardwood plywood were up 35 percent from the first quarter of 2006, and accounted for 54 percent of all U.S. imports of hardwood plywood, manufacturers said.
 
Though U.S. manufacturers go to great expense to assure their timber is harvested in an environmentally sound manner and glues used to make the plywood are nontoxic, their Chinese competitors do not, manufacturers said.
 
''We have an opportunity here to stop the United States from becoming the world's biggest consumer of illegal logging,'' Guay said.
 
Subcommittee chairman Sen. Ron Wyden, D-Ore., said it was vital to protect the thousands of jobs in hardwood plywood production, most of them in Oregon, particularly as rural areas where many of the mills are located struggle to deal with the loss of federal timber payments that support schools, roads, libraries and law enforcement.
 
The Office of the U.S. Trade Representative has identified nine different subsidies of Chinese plywood makers that may violate trade agreements, and has made a complaint to the World Trade Organization, said Tim Wineland, senior director of the Office of China Affairs.
 
China agreed in recent Strategic Economic Development talks to address the issue of illegal logging, Wineland added.
 
Customs agents are sampling Chinese hardwood plywood and, based on complaints from manufacturers and findings from an earlier investigation of flooring, expect to find much of it mislabeled to avoid tariffs, said Vera Adams, executive director of commercial targeting and enforcement for the U.S. customs agency.
 
An investigation into wood flooring from China found 120 manufacturers were mislabeling or misrepresenting their products, resulting in $30 million in lost tariffs, Adams said.
 
It is difficult for Customs to enforce prohibitions against products containing toxic glue made from formaldehyde, because it depends on the final use of the product, Adams added.
 
Chinese hardwood plywood often carries phony stamps of approval indicating it meets environmental and sustainability standards, said Ned Daly, vice president of U.S. operations for the Forest Stewardship Council, an international body that certifies forests and wood products meet the standards.
 
China has cut back on domestic logging after severe flooding killed thousands of people, and is now getting much of the birch and other hardwood for plywood from the Russian Far East and Southeast Asia, where oversight is lax or corrupt, Daly said.
 
Guay said China is moving into the high-value specialty products that are the mainstay of the U.S. hardwood plywood.
 
''If we lose these products, we lose our industry,'' he said.
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