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WASHINGTON TALK; At Hearings, Trade Gets Personal The New York Times, December 9, 1986

They came to the Commerce Department to air the pros and cons of higher tariffs on softwood lumber from Canada. But the issue just as easily could have been lamb meat from New Zealand, porcelain- on-steel cooking ware from Mexico or baby's breath, carnations and chrysanthemums from Peru.

The scene, repeated scores of times each year, was Room 6802 in the department's sprawling quarters a few blocks from the White House. It was all very civil, very low-key. But a lot of money was at issue and there were big-name lawyers there to argue determinedly for each side.

The colossal United States trade deficit has triggered strong demand for protection from a broad swath of industry and workers hurt by surging imports. Yet reliance on imports by other sectors of of the economy, like consumers, has created similarly strong resistance because higher tariffs mean higher prices.

The hearings to sort out the opposing arguments are scheduled after a preliminary finding by the Commerce Department that an import has entered the United States at unfairly low prices. The department then proposes a countervailing duty to offset the competitive advantage.

In the case of the Canadian lumber, which involves $3 billion worth of trade, the department made its preliminary finding Oct. 16, deciding that a 15 percent tariff was necessary to equalize the unfair competition because of the lower fees Candidian governments charge for cutting timber from public lands. The hearing was called to give everyone a chance to have some input in the final decision, due by Dec. 30.

''The Canadians are subsidizing their lumber companies' sales in the United States, which unfairly curbs jobs and profits in the domestic U.S. industry,'' said Alan W. Wolff, a former deputy United States Trade Represententative, now with the Wall Street law firm of Dewey, Ballantine, Bushby, Palmer & Wood. In arguing for the domestic industry, he called for a duty of at least 25 percent, unless Canada negotiates a settlement. Another Panel Must Rule

But Robert E. Herzstein, a senior partner of the Washington law firm Arnold & Porter, defended the practices of the Canadian industry. ''Canada does not confer a countervailable subsidy within the meaning of U.S. trade law,'' said Mr. Herzstein, a former Under Secretary of Commerce for international trade administration.

The Commerce Department finding will not be the end of the story. The case then goes to another Federal agency, the International Trade Commission, which must decide whether or not the domestic industry has been injured as a result of the low prices.

At the hearing last Thursday 25 witness appeared, and trade analysts say the real value is that any group, not just those represented by big-firm lawyers, gets a chance to be heard.

So it was that J. Douglas Jefferys, the president of Vixen Hill Gazebos of Elverson, Pa., told the lumber hearing of the severe damage that would befall his company if higher tariffs were sanctioned on Canadian lumber.

Old-growth, tightly grained red cedar from Canada is used in the prefabricated gazebos his company makes and sells. ''It has to come from Canada because there's no more of this wood left in this country,'' Mr. Jefferys related. ''We chopped it all down 25 years ago.''

The average price of his gazebos would rise from $6,000 now to $7,500 with the duties, he said, and that would mean fewer sales and perhaps layoffs in Elverson, a small town near Lancaster with 309 inhabitants. Vixen Hills employs 20 workers, 7 percent of the population.

Barbara Tillman, a department import official who has participated in 40 hearings over the last four- and-a-half years, said she enjoyed the human contact. ''It's in everybody's interest to hear the views,'' she said. ''It's far better than wading through piles of paper.''

By CLYDE H. FARNSWORTH, Special to the New York Times

Full Text: COPYRIGHT 1986 The New York Times Company. http://www.nytimes.com

Source Citation Farnsworth, Clyde H. "WASHINGTON TALK; At Hearings, Trade Gets Personal." New

York Times 9 Dec. 1986. Opposing Viewpoints in Context. Web. 2 Jan. 2016.

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