Wyden: "Jobs are in Jeopardy Because of Illegal Logging"

Wyden: "Jobs are in Jeopardy Because of Illegal Logging"

Wyden testifies before the International Trade Commission

Working to stop illegal and anti-competitive practices by foreign lumber companies, Senator Ron Wyden, Chairman of the Energy and Natural Resources Subcommittee on Public Lands and Forests, testified today before the International Trade Commission about his work to protect the American lumber industry. American manufacturers are increasingly struggling to compete with the low-priced wood and wood products being harvested from illegal sources and illegal logging is a source of severe environmental damage in many parts of the world.

Earlier this year, Senator Wyden introduced the Combat Illegal Logging Act of 2007. It expands the Lacey Act — which currently regulates trade in fish, wildlife, and a limited subset of plants — to prohibit the import, sale or trade in illegally-harvested wood and wood products.

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The full text of Wyden's statement for the record is below:

"I appreciate this opportunity to testify before the International Trade Commission.

Today, in the hardwood plywood and wood flooring industries, good-paying family wage jobs are in jeopardy because of illegal logging, illegal dumping, illegal subsidies and other illegal activities. The evidence of these anti-competitive practices is overwhelming. I am hopeful that there are only two real questions for the Commission: What are you going to do about it and when will you take action?

As Chair of the Subcommittee on Public Lands and Forests of the Senate Committee on Energy and Natural Resources, and as a Senator from Oregon, I have seen first-hand how illegal and anti-competitive practices are threatening the domestic hardwood plywood industry, and similar practices are endangering the flooring industry.

The forest products industry is a critical component of the Oregon economy and the hardwood plywood sector is an important contributor to Oregon's leadership in this area. Seventy percent of North America's hardwood plywood is manufactured by companies headquartered in Oregon.

This sector provides thousands of jobs in my state. These are good paying family wage jobs. The kind of jobs worth protecting and the kind of jobs that we need to see more, not less, of in our state. The pressures faced by the industry from anti-competitive practices pose a threat to the long-term health of the US hardwood plywood and flooring industry. This, in turn, could have serious consequences for Oregon communities and Oregon families that rely upon these family-wage jobs.

Over a year ago, I met with a group of Oregon hardwood plywood manufacturers to discuss problems concerning hardwood plywood imports threatening their businesses, and I knew something had to be done. Immediately. And since that time I have been working to investigate these extremely troubling allegations and taking steps to address them. I initiated several efforts to look into their concerns.

One of those efforts was to request an investigation in February of this year, with the assistance of Senate Finance Committee Chairman Max Baucus. We deeply appreciate the Commission's willingness to investigate this important issue.

I also undertook a variety of other efforts.

I held meetings with the United States Trade Representative and urged the Ambassador to raise concerns about hardwood plywood with the Chinese and determine whether the subsidy issues could be pursued in a World Trade Organization case. USTR subsequently filed a WTO subsidies case that specifically targeted subsidies benefiting the Chinese hardwood plywood industry. USTR continues to raise these Chinese hardwood plywood-related issues in a variety of venues.

I met with the Department of Commerce and secured their commitment to raise these concerns bilaterally.

I met with Customs and Border Protection and requested their assistance in investigating several Chinese hardwood plywood issues - in particular, the misclassification issue. Following the meeting, Customs reached out to industry experts at the Hardwood Federation and the Hardwood Plywood & Veneer Association in order to learn how to spot misclassified panels. Since then, industry has reported a dramatic increase in the number of inspections of hardwood plywood imports. This builds on efforts Customs undertook on hardwood flooring misclassification.

In May, I Chaired a hearing of the Subcommittee on Public Lands and Forests of the Senate Committee on Energy and Natural Resources to further explore the threats to the hardwood plywood industry from illegal Chinese timber and related threats. This hearing illuminated the extent of the problem we are facing.

From all the various investigations, there is no question that anti-competitive practices are rampant and they are harming US industry. These include illegal logging, illegal dumping, illegal subsidies, customs violations, fraudulent labeling and other anti-competitive practices.

I have already begun efforts in Congress to address the problem of illegal logging. Working with representatives from the Department of Justice and the White House Council on Environmental Quality, and with the industry and the environmental community, I introduced legislation that focuses on demand-side measures that can be used to curb illegal logging. The bill I introduced, S. 1930, the Combat Illegal Logging Act of 2007, enacts a revision to the Lacey Act, which makes it unlawful to import, export, transport, buy or sell timber and timber products taken or possessed in violation of federal, state or tribal law.

Bipartisan support for that legislation continues to grow. In the Senate, we have 14 cosponsors. And there is also growing support in the House of Representatives for a similar measure introduced by my colleague, Earl Blumenauer. I have heard from foreign governments as well, and I know that they are watching this legislation with great interest.

My efforts, particularly the hearing before my Subcommittee, revealed a great deal about the threats facing the hardwood plywood industry. What I learned has been shocking. Over the past few years, the U.S. hardwood plywood and flooring sector has experienced a dramatic downturn. Since at least 2003, U.S. production, shipment volume, production capacity, and market share have all declined. At the same time, the Chinese hardwood plywood sector has been surging. In fact, from about 2004 to 2006, Chinese hardwood plywood exports to the US increased from $463 million to $1.02 billion.

Even more troubling were the allegations made by the industry folks suggesting that this dramatic growth in the Chinese hardwood plywood exports - at the expense of U.S. industry - was based on a number of unfair and illegal practices including illegal dumping, illegal subsides, tariff misclassification, fraudulent stamping, and illegal logging. Similar pressures face the wood flooring sector. These will be further highlighted today.

Today's hearing offers the opportunity for the Commission to get the facts you need to take action. Once you do, I believe that the ITC will find, like I did, that there a number of anti-competitive practices going on that raise serious concerns for the hardwood plywood industry.

On behalf of the Oregon workers and communities who are threatened by these practices, I urge you to take action and do so promptly before they suffer further harm.
Thank you for the opportunity to testify and for investigating this important issue. I'd also like to express my appreciation for the many witnesses giving their testimony today.

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