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US housing starts resume downward trend
Privately-owned housing starts fell 14% in January to a seasonally adjusted annual rate of 1.41 million units, according to the US Commerce Department. This was the
slowest pace in more than nine years and seems to suggest that the housing market is not stabilizing as some had
hoped. Housing starts was 38% below the pace of a year ago (see chart). The drop was mainly due to an 11% drop
in the single-family sector, which accounts for about 80% of the houses built. Home builders are working down the
inventories of unsold homes. Meanwhile, building permits (down 2.8% from December) and housing completions
(down 1.2%) also fell in January. Some analysts think that home building will be weak through spring and perhaps
until the third quarter.
USA files trade complaint against Chinese plywood
The US Trade Representative, Susan C. Schwab, filed on 2 February a complaint against Chinese plywood at the
WTO. The complaint challenges China¡¯s use of subsidies for hardwood plywood products. According to Ms.
Schwab, China¡¯s market-distorting subsidies are WTOinconsistent practices that harm US workers and
businesses and create an uneven playing field. The filing follows pressure from hardwood plywood manufacturers
in Oregon. Senator Ron Wyden (Oregon) had asked the US government to investigate practices by Chinese
competitors that threatened US hardwood plywood manufacturers (see TTM 11:23). US producers argue that
the Chinese plywood does not meet formaldehyde standards and it is being used in secondary manufacture of
cabinets and furniture. Producers also are concerned that Chinese imports are sold at artificially low prices allegedly
due to subsidies from the Chinese government, fraudulent labelling and illegally harvested logs.
Paraguay plywood exceeds GSP limit
The Office of the US Trade Representative (USTR) has advised that imports of hardwood plywood (4412.13.25)
from Paraguay have exceeded the competitive need limit (CNL) in 2006 under the US General System of
Preferences (GSP) program, IWPA reported. An earlier warning had been issued in November 2006 based on
imports in the year through August (see TTM 11:21). The product is not at risk of losing future duty-free treatment
unless a CNL waiver is granted by 1 July 2007. IWPA members may petition the USTR for a waiver in writing before 16 March 2007.
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