NationStates Jolt Archive

US claims that Canada's softwood industry was unfairly subsidized.

Canada claims that the US is unfairly collecting tariffs (now worth $5 billion) from Canadian softwood and give it to their own lumber industry, and not respecting NAFTA rulings.

Who wins?

For those of you who don't know about the softwood lumber dispute, go to: http://www.cbc.ca/news/background/softwood_lumber/

Canada. In the end, the US is wrong and the rule of law will have to prevail and be effectively implemented. Anything else destroys the economic accomplishments of NAFTA and ruins the intent of the treaty.

Europe.

Europe.
What about Europe?

No matter who is right or wrong, you know the US will win. To say anything else is disingenuous and idealistic. The world doesn’t work a certain way because you want it to. It works the way it does.

How do the US is going to win. All of NAFTA and WTO rulings favor Canada.

What about Europe?

They are going to be the winners.

How do you the US is going to win. All of NAFTA and WTO rulings favor Canada.
Since when does the US care about international law?

Since when does the US care about international law?
*nods head in agreement*

Tarriffs are evil and are the bain of human existence! Both are receiving subsidies in their own way.
Who'll win?
China. :mp5: :sniper:

The Internets.

Well according to Official Statistics the E.U. is largest trading block in the world and Europe is the single biggest contributor of foreign capital to the United States, even outweighing U.S. direct investment to the E.U. So the European Union is by far the most powerful trading bloc.

....China?

The softwood dispute is incredibly agitating. To me the issue should have ended long ago, but the Americans continue to drag there feet in the sand and ignore rulings by WTO and NAFTA commitees and simply point to the fact that a United States commitee agrees with them (well no duh).

However the sad fact of all this is that we (Canada) are far more dependant on the US than they are on us, so a trade war would hurt us far more if the U.S. decided to fight back. The best option we could ever have in hurting them is via energy-related industries: Canada is responsible for OVER HALF of all U.S. energy dealings.

And I for one have yet to hear a reasonable exscuse for as to why the Americans aren't abiding by the several rulings that are in Canada's favour.

OMG, this thread is about the softwood lumber dispute. What does China and the EU gotta do with softwood.

Lmao

And I for one have yet to hear a reasonable exscuse for as to why the Americans aren't abiding by the several rulings that are in Canada's favour.

They don't like you.

Well it don't matter anyway, the U.S. has only 50 years of gas guzzling non-sensical policys left. Then Europe and China will jointly rule world economics. If the oil price was in Euro, it would lead to economic collapse in America.

Canada should put tarrifs on American Steel and auto parts. And possibly other major American industries. Canada can also limit the amount of raw resources sent into the U.S. in terms of hydro power and fossil fuels.

And I for one have yet to hear a reasonable exscuse for as to why the Americans aren't abiding by the several rulings that are in Canada's favour.
They want to keep our $5 Billion to cover their Iraq war expenses, their fiscal deficits, debts, etc......

'merica

cause Canadia can't affort to fight with anything more then rethoric

Well it don't matter anyway, the U.S. has only 50 years of gas guzzling non-sensical policys left. Then Europe and China will jointly rule world economics. If the oil price was in Euro, it would lead to economic collapse in America.

And then the rest of the world. When America's economy is hurting, so is the world economy. And the Euro has a lot more downside than the dollar, so the EU would be hurting in fairly short order.

We've got plenty of oil, both stored and in the ground. Whet we need is refining capacity.

The best option we could ever have in hurting them is via energy-related industries: Canada is responsible for OVER HALF of all U.S. energy dealings.
*runs to the Canada/US border, snips a BC Hydro line, the states went blackout, runs away... :D

If the oil price was in Euro, it would lead to economic collapse in America.

why pray tell?

Canada should put tarrifs on American Steel and auto parts. And possibly other major American industries. Canada can also limit the amount of raw resources sent into the U.S. in terms of hydro power and fossil fuels.

2 problems; #1 - what do you think we'll do to retaliate?

#2 - what are you going to do about all the unemployed workers after you snip power?

No matter who is right or wrong, you know the US will win. To say anything else is disingenuous and idealistic. The world doesn’t work a certain way because you want it to. It works the way it does.

I think the Canadian economy will naturally shift to other trading partners if we go to trade war with the United States. This is part of the reason why I think the Canadian economy will be less likely to stumble than the American one in a trade war. The cost of trading resources with other countries is only prohibitive currently because it's cheaper to sell to the US. When this changes, we'll start going elsewhere for decent profits.

Our predicament has received media coverage. We know what they've done to make us take these actions, which could give us an advantage. A trade war is a test of endurance. With a populace so aware of our reasons for engaging in a trade war, the Canadian government will hold onto its support longer in the case of a war. I would imagine the sentiment in the US on the other hand would be that softwood lumber isn't that important and that the US should just capitulate to our demands to lower prices in America again. Basically, while it's unclear how hard we'd be hit by a trade war due to the fact that Canada trades with America out of convenience rather than necessity, it is quite clear that the average Canadian would be more prepared to accept the hardships involved with a trade war than the average American. To Canadians this has become an issue of national pride. To the Americans, this is an annoyance and they likely don't care if their government gives in. That's what gives Canada the edge.

I think the Canadian economy will naturally shift to other trading partners if we go to trade war with the United States. This is part of the reason why I think the Canadian economy will be less likely to stumble than the American one in a trade war. The cost of trading resources with other countries is only prohibitive currently because it's cheaper to sell to the US. When this changes, we'll start going elsewhere for decent profits.

Our predicament has received media coverage. We know what they've done to make us take these actions, which could give us an advantage. A trade war is a test of endurance. With a populace so aware of our reasons for engaging in a trade war, the Canadian government will hold onto its support longer in the case of a war. I would imagine the sentiment in the US on the other hand would be that softwood lumber isn't that important and that the US should just capitulate to our demands to lower prices in America again. Basically, while it's unclear how hard we'd be hit by a trade war due to the fact that Canada trades with America out of convenience rather than necessity, it is quite clear that the average Canadian would be more prepared to accept the hardships involved with a trade war than the average American. To Canadians this has become an issue of national pride. To the Americans, this is an annoyance and they likely don't care if their government gives in. That's what gives Canada the edge.
I like your thinking - and I think your take on the National Character is right on the money. We can take it.

I think the Canadian economy will naturally shift to other trading partners if we go to trade war with the United States. This is part of the reason why I think the Canadian economy will be less likely to stumble than the American one in a trade war. The cost of trading resources with other countries is only prohibitive currently because it's cheaper to sell to the US. When this changes, we'll start going elsewhere for decent profits.

Our predicament has received media coverage. We know what they've done to make us take these actions, which could give us an advantage. A trade war is a test of endurance. With a populace so aware of our reasons for engaging in a trade war, the Canadian government will hold onto its support longer in the case of a war. I would imagine the sentiment in the US on the other hand would be that softwood lumber isn't that important and that the US should just capitulate to our demands to lower prices in America again. Basically, while it's unclear how hard we'd be hit by a trade war due to the fact that Canada trades with America out of convenience rather than necessity, it is quite clear that the average Canadian would be more prepared to accept the hardships involved with a trade war than the average American. To Canadians this has become an issue of national pride. To the Americans, this is an annoyance and they likely don't care if their government gives in. That's what gives Canada the edge.

Yeah, good luck with that. Unfortunately only the americans need or want your crappy stuff.

Well it don't matter anyway, the U.S. has only 50 years of gas guzzling non-sensical policys left. Then Europe and China will jointly rule world economics. If the oil price was in Euro, it would lead to economic collapse in America.

You realize that when the oil runs out for the U.S., it runs out for everyone, right?

Yeah, good luck with that. Unfortunately only the americans need or want your crappy stuff.
Right, got it the first few times on the other thread, Flintoff. Good luck with your one-man war to make us out like the assholes in all this.

Yeah, good luck with that. Unfortunately only the americans need or want your crappy stuff.
Then why has China showed interest in our softwood lumber?

Then why has China showed interest in our softwood lumber?

there is no doubt that other people are interested in your stuff, but they're not able to pay anything near what we're willing to pay and you'll have to ship it half way around the world instead of over the St. Laurence

there is no doubt that other people are interested in your stuff, but they're not able to pay anything near what we're willing to pay and you'll have to ship it half way around the world instead of over the St. Laurence
Whatever it takes to find honest trading partners, I suppose. Oh well.

Yeah, good luck with that. Unfortunately only the americans need or want your crappy stuff.

I don't see why you need to be so ethnocentristic in your posting.

Had your point could have been made with a little more tact, you would have had a few more people listen to you and a few less jump down your throat. That assumes you want people to listen to you, but I think that's the point of posting online.

Anyway, I think your point was that the cost of sending things overseas will make production more expensive in Canada. If it wasn't you can feel free to correct me.

Anyway, I won't deny this point, because it is true, to an extent. At the same time, however, I believe you are overestimating the true costs of doing international business these days. While it is more expensive to ship and item than just truck it across the border, that difference is not too great. Yes, the most inefficient companies in Canada will have to shut down, but the vast majority will likely carry on with new markets. A common misconception is to point the fact that 80% of Canada's trade with the US as an indication that Canada's trade would drop by 80% if the border were closed. It is completely impossible to predict what percentage of trade would reorient itself to compete in a new market, but it is ridiculous to suggest that none of these industries would be able to cope. Let's say even 1 in every 10 industries goes broke. That means that just 8% of our trade is actually lost. Combine that with the fact that trade makes up a quarter of our economy. Suddenly, that giant loss of 80% is down to a mere 2% of our total GDP, and when you consider that we're supposed to grow by more than 2% this year, the trade war with America doesn't even put us in recession. Combine that with the fact that the increased need for competition will make Canadian companies leaner and more efficient, as the softwood lumber dispute has already demonstrated, and you have a trade war with minimal real economic effects. The real fight is for the hearts and minds of Canadians and Americans, and I already explained why the Canadians have the edge there.

A common misconception is to point the fact that 80% of Canada's trade with the US as an indication that Canada's trade would drop by 80% if the border were closed. It is completely impossible to predict what percentage of trade would reorient itself to compete in a new market, but it is ridiculous to suggest that none of these industries would be able to cope. Let's say even 1 in every 10 industries goes broke. That means that just 8% of our trade is actually lost. Combine that with the fact that trade makes up a quarter of our economy. Suddenly, that giant loss of 80% is down to a mere 2% of our total GDP, and when you consider that we're supposed to grow by more than 2% this year, the trade war with America doesn't even put us in recession.

but in all the time you've existed as our little brother have you built up international contacts? how big is your shipping fleet? can you ports export all that you currently truck to America? and that dosn't even take into account all the cross boarder benifits you currently enjoy under NAFTA

either way, its far better for Canada to just give up and let the soft lumber go

but in all the time you've existed as our little brother have you built up international contacts? how big is your shipping fleet? can you ports export all that you currently truck to America? and that dosn't even take into account all the cross boarder benifits you currently enjoy under NAFTA

either way, its far better for Canada to just give up and let the soft lumber go

Not quite. As a single issue, softwood lumber is not worth our effort, but if we let the Americans trample us here it sets a precedent that would let our agreements under NAFTA slide until the US was really hurting us with their policies.

We consider it a preemptive strike against a target that will threaten our national security if they continue down the same path and ignore the rulings of international organization that have told them to stand down. We would merely be enforcing the laws that these international organizations do not have the strength to enforce. They can make all the resolutions they want, but the truth is that we have evidence this country is breaking the international law that has told them not acquire WMDs, uh, I mean, put up tariffs. Stupid parallels keep getting me confused...

Not quite. As a single issue, softwood lumber is not worth our effort, but if we let the Americans trample us here it sets a precedent that would let our agreements under NAFTA slide until the US was really hurting us with their policies.

doubtfull, if we were going to do that we probably would have picked a more important industry (to Americans, not Canadians)

doubtfull, if we were going to do that we probably would have picked a more important industry (to Americans, not Canadians)

Actually, you picked a very important issue, to the timber lobby. Actually I think the steel and farm lobbies want a word with your government now. See how this works?

how big is your shipping fleet? can you ports export all that you currently truck to America?
As it is now, I do not think so. However Canada is investing in its ports. The port in Prince Rupert is about to recieve massive upgrading; when it is finished its maximum capacity will be double the that of the port in Vancouver (which now has a capacity lager than the rest of the ports in Pacific Canada combined). It seems in the near future Canada will be able to ruduce its dependance on trade with America.

either way, its far better for Canada to just give up and let the soft lumber go
Why should we stop fighting for something that would benifit us? How do you think the workers who lost their jobs (or had their rate of pay reduced) would react if Canada just gave up on this issue?

Actually, you picked a very important issue, to the timber lobby. Actually I think the steel and farm lobbies want a word with your government now. See how this works?

come on, if we planned this we would have started with steel

come on, if we planned this we would have started with steel

Um, you did (http://www.economist.com/PrinterFriendly.cfm?Story_ID=1021516), just against the Europeans instead of us because we don't produce as much steel.

Why should we stop fighting for something that would benifit us? How do you think the workers who lost their jobs (or had their rate of pay reduced) would react if Canada just gave up on this issue?

well thats just the point, the only thing you can do to punch back is to stop certian areas of trade and then you'd have to ask that same question to tens of, if not hundreds of, thousands more people

Um, you did (http://www.economist.com/PrinterFriendly.cfm?Story_ID=1021516), just against the Europeans instead of us because we don't produce as much steel.

but they're not in NAFTA, and not as cute as you are

but they're not in NAFTA, and not as cute as you are

Actually, I reviewed the article, and we were included in the tariffs too; the Europeans were just angrier about it because they produce more steel.

EDIT: And the farmers were next (http://www.economist.com/research/backgrounders/PrinterFriendly.cfm?Story_ID=1120469).

I think I'll take a pool on which industrial lobby group the American government will give in to next. Anyone care to give some suggestions?

I think I'll take a pool on which industrial lobby group the American government will give in to next. Anyone care to give some suggestions?

The oil industry? The automotive industry?

The port in Prince Rupert is about to recieve massive upgrading; when it is finished its maximum capacity will be double the that of the port in Vancouver (which now has a capacity lager than the rest of the ports in Pacific Canada combined). It seems in the near future Canada will be able to ruduce its dependance on trade with America.
Good times
:D :D :D

The oil industry? The automotive industry?
I think the automotive industry is a possibility. A thread about a month and a half ago pointed out that some automotive companies are building their new plants in Canada because American employees have to be taugh with pictures because of illiteracy rates (according to Honda).

I think the automotive industry is a possibility. A thread about a month and a half ago pointed out that some automotive companies are building their new plants in Canada because American employees have to be taugh with pictures because of illiteracy rates (according to Honda).

Actually, I was being sarcastic as the American government already kowtows to the oil and automotive industries.

A thread about a month and a half ago pointed out that some automotive companies are building their new plants in Canada because American employees have to be taugh with pictures because of illiteracy rates (according to Honda).
BWA-HA-HAA!

*sniff*

It's funny, and it's sad, all at the same time.

BWA-HA-HAA!

*sniff*

It's funny, and it's sad, all at the same time.
To be fair that is in the Southern US. Props to Honda, for reassuring the stereotype that people from the Southern US lack basic education.

To be fair that is in the Southern US. Props to Honda, for reassuring the stereotype that people from the Southern US lack basic education.

Alabama specifically, if memory serves.

All I can say is I wouldn't want a car built by someone who had to be taught with pictures.

well thats just the point, the only thing you can do to punch back is to stop certian areas of trade and then you'd have to ask that same question to tens of, if not hundreds of, thousands more people
Are you saying that more Americans would lose their jobs without the tarrifs than Canadians if the tarrifs were to stay?

When it comes right down to it, the US and Canada will settle this just like they have for the last 20 years. We'll either place a small tax on imports or a set FBM Duty free with rising rates after the limit has been meet. I personally think we (the US) are being a little rediculous as usual with the 19.31% Duty rate + 12.57% AD/CV (antidumping / countervailing). Canada is not blameless either. Canadian industry is at an advantage due to low stumpage fees that American companys can't compete with. The American system is an auction to purchase the right to harvest which means the highest bidder gets it, where-as the Canadian Gov. sets the price them selves. These stumpage fees tend to be much lower than the prices which come out of the US auctions.

In short: I gotta get the hell outta this EFFed up country... But I sure as hell am not moving to Canada. I need sleep.

The price of Canadian stumpage fees is lower comparatively to the US because it also comes with a requirement that the logging industry will be ecologically responsible for the land that they cut. This costs them money that is not required of logging companies in the United States.

As such, there is no illegal subsidy, as has been determined multiple times by various panels in NAFTA and the WTO, panels comprised of both Americans and Canadians. There is a different pricing scheme, true, but logging companies aren't getting any particular deal here. What is happening however, is that our own logging industry, in response to the rather brutal reaming they got from the previous agreement with the US, had to significantly upgrade its technology to be competitive. Canadian lumber is cheaper simply because our industries had to become more efficent, while the US logging industry has been relatively well protected.

Canada has a couple of advantages in a trade war. First, our primary exports are in resources, our primary imports are finished and manufactured goods. If tariffs are applied to American goods coming in, that simply gives more incentive for home-grown Canadian industries to spring up and create the goods that we currently import. We have the know-how, what we haven't had is the pricing incentive to compete with the US's massive industrial base. On the other hand, if the US retaliates with tariffs on our exports to them, that's primarily natural resources. Unfortunately, it's far more difficult to ramp up production of natural resources if you don't have them to begin with.

In addition, Canada is now the only country in the G8 to have a surplus federal budget this year, as well as the only country to have had these surpluses for several years running now. Our corporate tax rates are therefore dropping, and are now often lower than the American counterparts. Our economic house is in order. This gives us the ability to withstand an economic slowdown to some degree. The US economy, while still huge, is increasingly resting on a foundation of credit. Credit requires constant wealth generation to maintain or it starts getting called back. A slowdown in the US economy could easily snowball.

In short, America has much more to lose in a trade-war, especially one that lasts long enough for Canadian manufacturing industries to come on line as is currently happening with our beef processing.

With these things in place, the US's call for negotiations are likely to fall on deaf ears, especially considering that we have the legal high-ground. Asking for negotiations is very much akin to a con-artist, after being caught, tried, and found guilty, now saying "Hey, we can make a deal, right?" Since the issue has been widely publicized in Canada, our politicians really don't have the option to back down, since any such movement will be seen as weakness by the Canadian public, and likely mean their removal come election.

Remember America - this is how the Clone Wars got started...