Chile will offer U.S. home builders a new source of less expensive lumber.

The National Association of Home Builders has just concluded four days of negotiations with Chilean trade, industry, and government representatives aimed at boosting the export of softwood lumber and other wood products to the United States.

According to Jerry Howard, CEO of the National Association of Home Builders, the meetings with more than 100 Chilean businesses engaged in the production of lumber as well as with trade associations and government representatives were very fruitful. We believe that increasing competition in the U.S. lumber market will benefit American families looking to purchase homes and U.S. builders looking for a reliable source of reasonably priced lumber.

The discussions included setting up connections between Chilean producers and American consumers as well as identifying and addressing any policy obstacles to boosting Chilean exports from their current level.

Two of the top three Chilean lumber producers that NAHB spoke with, along with a number of other smaller producers, all said they would cooperate with their government to boost exports. A meeting with Swedish lumber producers in Chile was also arranged by NAHB, and they expressed a desire to continue talking about boosting lumber exports to the U.S. and forging closer ties.

The meetings in Chile coincide with negotiations between the United States and Canada on a new trade agreement for softwood lumber. Despite the fact that American home builders would prefer to buy all of their softwood lumber and wood products from domestic suppliers, the country currently lacks the capacity to meet its demand for lumber. The United States imports the vast majority of softwood lumber from Canada. The most recent three-year average share of Canadian lumber imports in the American market is 28%.

An agreement between the United States and Canada that had been in effect for nine years and established a system of fees and quotas on Canadian imports that were triggered in response to changes in the market price of softwood lumber expired last October. There is currently a one-year “cooling off” period between the two countries, which ends on October 12. During this time, neither country may file a trade complaint regarding imports of softwood lumber.

Since the 1980s, a number of disputes have hampered trade, causing unneeded price increases for sectors like the home building industry that depend on softwood lumber and straining ties between the United States and its northern neighbor. The American housing market is in a bind as a result of this shortsighted political impasse.

In order to guarantee that American consumers have access to a steady, dependable, and affordable lumber supply, NAHB believes that as U.S. and Canadian negotiators discuss the specifics of a new agreement, they must keep in mind the U.S. housing market.

Even though Chile only accounts for 1.22 percent of the U.S. lumber market at the moment, NAHB believes that it has enormous growth potential because the two countries have a free trade agreement.

The demand for softwood lumber will increase as the housing recovery in the United States gains momentum, predicted Howard. “This is why increasing lumber trade with Chile could be advantageous for both countries. While U.S. industries like housing that rely on a steady supply of softwood lumber would be able to meet the housing needs of American consumers and keep lumber and housing affordable, Chile would have the chance to increase its exports and market share to the United States.”