Message to the Congress on Import Relief for the Wood Shakes and Shingles Industry

May 23, 1986

To the Congress of the United States:

In accordance with Section 203(b)(1) of the Trade Act of 1974 (19 U.S.C. 2253(b)(1)), I am writing to inform you of my decision today to grant import relief to the western red cedar shakes and shingles industry. At the request of the Northwest Independent Forest Manufacturers and other private petitioners, the United States International Trade Commission (ITC) instituted an investigation to determine whether increasing imports of wood shakes and shingles were injuring the domestic wood shakes and shingles industry. The ITC found that imports are a substantial cause of serious injury or threat thereof to the domestic red cedar shakes and shingles industry. Red cedar shakes and shingles imports have increased dramatically in recent years, causing a substantial drop in domestic production, profits, and employment.

I have decided to modify the ITC remedy by providing for a declining tariff over the period of relief, rather than a constant 35 percent duty as recommended by the ITC. The relief program I am implementing calls for a duty of 35 percent ad valorem for the first 30 months of the period, a 20 percent ad valorem duty for months 30 through 54, and an 8 percent duty for months 54 through 60. This 5-year graduated relief program will facilitate the industry's transition back to free market competition and will help reduce consumer costs in the latter months of the relief period. Petitioners have indicated that the industry would support the concept of graduated relief.

In conjunction with providing import relief, I have directed the United States Trade Representative to request that the ITC advise me of the probable economic effect on the domestic industry of the termination of import relief after 30 months. This advice is to include a review of the progress and specific efforts being made by the domestic producers of western red cedar shakes and shingles to adjust to import competition. The Trade Representative is also directed to request, on my behalf, advice regarding termination of relief from the Secretaries of Commerce and Labor.

The ITC, Commerce, and Labor advice is to be provided to me, through the Trade Representative, 3 months prior to the expiration of the first 30-month relief period. It is my intention to continue relief for the entire 5-year period if it appears at the end of 30 months that market conditions warrant a continuation of relief and that domestic producers have begun to make reasonable progress toward adjustment.

Ronald Reagan

The White House,

May 23, 1986.