Canadians at odds over tariffs
Opposing groups present case on safeguards
By Michael J. Knell -- Furniture Today, January 22, 2006
Toronto — The Canadian Council of Furniture Manufacturers and the Coalition for Fair Furniture Trade both argued their case on safeguard tariffs on Chinese imports during the winter market here.
In a letter to retailers seeking support for its drive against tariffs, the recently formed Coalition for Fair Furniture Trade, comprised mainly of importers, argued that duties wouldn't save domestic factories and would hurt retailers.
The CFFT opposes the Canadian Council of Furniture Manufacturers' petition to the Canadian International Trade Tribunal seeking such tariffs.
In the letter, the coalition said it needs about C$500,000 to cover expenses, and asked retailers to contribute from C$500 to C$15,000, depending on their volume.
The letter was signed by coalition members Ashley Furniture, Hamilton & Spill, Lifestyle Furniture, Magnussen Home Furnishings, Mazin Furniture, Monarch Furniture and Primo Furniture.
The Toronto-based law firm of Heenan Blaikie is representing the coalition. CFFT counsel Paul Lalonde said the group includes not only importers but retailers and manufacturers.
"The coalition firmly believes that retailers, particularly smaller independent retailers, will be harmed by the imposition of duties," he said. "The large retailers are organized through the Retail Council of Canada, but ... retailers who are not members of the RCC also ... must be heard."
The RCC opposes the CCFM's petition. Sales representatives working for coalition members also have been asked to support the opposition effort financially.
The CCFM said in a written statement the only way to determine whether Canadian manufacturers have suffered material injury from Chinese imports is to allow the CITT to do its work. The CCFM comprises factory associations Furniture West, the Ontario Furniture Manufacturers Assn. and the Quebec Furniture Manufacturers Assn.
"The importers ... are brandishing the specter of price increases and falling sales, which they claim would result from the imposition of safeguards," the CCFM said. "The council would like to emphasize that when nations belonging to the World Trade Organization agreed to China's admission, they provided adjustment mechanisms.... The industry is taking fully legitimate steps to apply those mechanisms."
In its letter to retailers, the CFFT said, "The questionable benefit of protecting a relatively small number of furniture manufacturing businesses and employees is far outweighed by the negative economic impact that higher furniture prices will have on Canadian consumers."
CFFT counsel Lalonde said the rise in Chinese imports isn't the domestic industry's sole source of trouble and isn't the only factor to be considered by the CITT. "Manifestly, the increase in the (value of the) Canadian dollar relative to the U.S. dollar is an overwhelming factor that has absolutely nothing to do with imports," he said.
"Clearly, it is not in the best interests of Canadians to impose safeguard duties (since) these duties will harm many Canadian companies, jeopardize jobs ... and damage our relationship with an increasingly important trading partner," Lalonde said.
The CCFM compared the situation to that of the early years of the North American Free Trade Agreement, when the industry sought and received a five-year adjustment period.
In December, the CITT sent a questionnaire to Canadian manufacturers seeking information on the impact of imports. The surveys were to be returned by Jan. 9, but an extension until Jan. 30 has been granted.
Once the surveys have been submitted, the CITT will have 21 days to decide whether to investigate, then would have 90 days to investigate, hold hearings, write a report and make a recommendation to the federal government. A final ruling likely would come in June at the earliest.
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