NationStates Jolt Archive


Trade war possible?

The Chinese Republics
15-10-2005, 08:47
Martin rejects softwood negotiation

Terry Pedwell
Canadian Press

Friday, October 14, 2005

OTTAWA -- Prime Minister Paul Martin has warned U.S. President George W. Bush that Canada will wage its battle over softwood lumber in American courts -- and in the court of public opinion.

Martin spoke with Bush by phone Friday but the leaders failed to make any progress on the softwood issue. It was unclear which leader made the call.

But officials said afterwards that neither budged from his original position on softwood lumber during the 20-minute chat.

Bush maintained that he prefers a negotiated settlement, said officials for both Martin and the president.

"The president said he believes we need to get back to the negotiating table and try to find a lasting solution," said White House spokesman Scott McClellan.

"This is an issue that has gone on for some time. And we would like to see it resolved."

The prime minister insisted there's no reason for Canada to negotiate because it has already won all NAFTA challenges to U.S. tariffs and duties that have cost Canadian lumber firms $5 billion.

"Canada has won panel decision after panel decision," Martin said later as he oversaw the inauguration of a new Quebec-U.S. border crossing.

"Fundamentally, what one might call the final court of appeal under NAFTA has also confirmed the Canadian position.

"And that should be respected."

A NAFTA extraordinary challenge committee ruled in August that Canadian exports pose no threat of injury to American producers.

But the U.S. government signalled it wouldn't accept the ruling, saying it was already complying with an opposing World Trade Organization decision on the matter.

Martin told Bush that Canada will continue fighting in the U.S. courts and by appealing to Americans who would benefit from cheaper Canadian lumber. He suggested that would be an embarrassment to Bush.

"(Martin) told the president that we view it as a shame that we should have to take the U.S. to court in its own country to make that point," said a spokesman for the prime minister.

"But we're more than prepared to do so and we will do so."

Martin's tough stand was praised by Ontario Premier Dalton McGuinty, who met Friday with B.C. Premier Gordon Campbell and Jean Charest of Quebec to discuss the issue.

"It's become pretty obvious to me that our American cousins have dug in," McGuinty said in Toronto.

"So I think it's time for the prime minister to go to bat, and understand that we're playing hardball, and to do what he needs to do to get the attention of Washington."

Still, some experts doubt that Canada can win the battle by going to the public, because the issues involved are too complicated.

"Softwood is a national, emotional issue in Canada, said David Biette, director of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, D.C.

"It's sort of become a proxy for frustration with the United States.

"But very, very few people in the United States even know what softwood lumber is, that there's even a dispute with Canada."

Opposition critics denounced Martin's stand, after demanding for months that he speak directly with Bush.

"All he has served to do by doing this in a backwards fashion is harden the U.S. administration's position," said Conservative MP John Duncan.

"We're now looking at a very expensive and time-consuming process through American courts that, in the end, puts us right back in the situation we were in before signing NAFTA," added B.C. New Democrat Peter Julian.

As the Canada-U.S. softwood dispute lingers, Canada is looking to other markets for its lumber. Natural Resources Minister John McCallum, in Beijing on Friday, announced a $750,000 investment in the so-called "Super E" housing system for the Chinese market. Homes built under the program use Canadian lumber.

Earlier this week, China's ambassador to Canada, Lu Shumin, predicted sales of Canadian construction lumber in China will grow substantially, calling it a "huge market."

Canadian lumber exporters have paid more than $5 billion in duties since May 2002, when U.S. lumber producers filed their fourth trade complaint in 20 years.

Canada estimates that, based on past NAFTA rulings, the U.S. should pay back at least $3.5 billion of the duties collected so far.

A dispute resolution panel under the North American Free Trade Agreement has five times ordered U.S. trade officials to review the way they determine Canadian lumber exports are subsidized.

The NAFTA panel, made up of three American and two Canadian trade experts, recently gave the United States until Oct. 28 to comply.

If the panel's ruling is implemented, the countervailing duty rate would fall below one per cent, which under trade rules would result in its cancellation, according to the B.C. Lumber Trade Council.

During Friday's phone call, the leaders also discussed Canada's opposition to a U.S. plan to drill for oil in an Alaska Arctic wildlife refugee.

Bush insisted he must move forward because his country needs oil.

The NDP's Julian says Canada should be talking about an export levy on energy to retaliate for the softwood duties.

"Americans respect countries that stand up for themselves," he said.

Martin and Bush also spoke briefly about the upcoming Summit of the Americas in Argentina, the slow pace of peacekeeping movements in Sudan and next month's elections in Haiti.

© The Canadian Press 2005

***

It's simple Bush, give us back our five million! Why do you need our money anyway? Saving up for the Iran or N.Korea war???
Leonstein
15-10-2005, 10:57
NAFTA always seemed somewhat suspect to me.
It seemed to be very one-sided, and if the US won't even agree on something this basic, I guess it's outlived its usefulness, just like the alliance with "Old Europe".

And if you won't even open your borders to the free flow of labour, then how can you call it a free trade agreement anyway? Labour is probably the most integral good in the economy.
The Chinese Republics
15-10-2005, 20:39
*bump
The Chinese Republics
15-10-2005, 20:43
NAFTA always seemed somewhat suspect to me.
It seemed to be very one-sided, and if the US won't even agree on something this basic, I guess it's outlived its usefulness, just like the alliance with "Old Europe".

And if you won't even open your borders to the free flow of labour, then how can you call it a free trade agreement anyway? Labour is probably the most integral good in the economy.You're right, if the US don't respect NAFTA, what's the point of having free trade? Maybe we should get rid of Brian Mulronley's boo boo and start trading with China.
Drunk commies deleted
15-10-2005, 20:46
So, do you guys want me to write my congressman and tell him to pay the 5 billion we owe you? It probably won't help, but I'll do it if you want.
Lotus Puppy
15-10-2005, 20:48
The lumber lobby in Canada is the identical twin of the farm lobby in the US: economically marginal to Canada, yet politically powerful because entire towns and provinces depend on it. I'm not endorsing the raise on import tarriffs into the US, but we must put things into perspective. It's a political punchbag that only matters to very few people. The Canadian government would be wise not to waste resources on such a small thing when there are other, more productive economic sectors that need to be grown and encouraged.
Leonstein
16-10-2005, 01:10
The lumber lobby in Canada is the identical twin of the farm lobby in the US...
Actually, the US Farm Lobby works against free trade in order to keep its inefficient production alive.
The Canadian Timber Lobby works for free trade, in order to profit from its more efficient production.
Vetalia
16-10-2005, 01:12
Actually, the US Farm Lobby works against free trade in order to keep its inefficient production alive.
The Canadian Timber Lobby works for free trade, in order to profit from its more efficient production.

The US Farm Lobby is America's biggest recipient of welfare, also.
The Similized world
16-10-2005, 01:29
Someone's prolly gonna have my head for saying this... But you can kiss that money goodbye. The US is infamous for NEVER paying what they owe. I suspect there's something written about it in invisible ink in their constitution.

And I don't think there'll be a tradewar. Canada would be hurt a lot more than the US. That's why half the nations in the world aren't already in a tradewar with the US.