Decision Canada 2006

Saturday, December 03, 2005

Softwood Lumber - Who is going to step up to the plate?

With much focus being placed on health care, the GST, and the Quebec separation issue little has come to light with respect to softwood lumber. As many readers of Decision Canada are aware that the US has disregarded multiple WTO and NAFTA rulings the US still continues to illegally collect millions in import duties on Canadian softwood. The previous government was totally ineffective in ensuring that Canadian softwood producers have fair access to the US market.

Many of the US home improvement retailers and thousands of American citizens have called for the duties to be abolished and the ~4.9 billion that has been collected be returned to Canada but the current American government has listened to a few extremely "red" states that produce lumber and have kept the duties in place. With the hurricane causing a great need for supplies to rebuild, this is driving American lumber costs up harming millions of consumers.

The question is, which party has the guts to stand up to the US and start fighting back. All three opposition parties voiced their support for loan guarantees for softwood lumber producers (press release - NDP.ca.) Not one party has released any policy documents regarding softwood lumber.

Phone queries to party headquarters returned the following:

Conservative: They will appoint a special envoy to focus on dispute and work to improve trade in general with other countries in NAFTA.

Liberal: Will not go into a trade war, will attempt to utilize every diplomatic means and the courts to eliminate the duties. In the interim, they have brought in relief for the companies harmed by the duties.

NDP: "Fairly disappointed with Paul Martin's inaction" They are in favour of the producers getting their money back. Suggested linking oil and other energy trade to the issues.

I know, I've been very across the board with respect to what I'm saying here. Although my initial reaction was to support starting a trade war, thinking about the magnitude of our trade relationship with the US, Cutting the US off on energy resources may cause more duties to be placed on more Canadian goods to counter regardless of the NAFTA and WTO rulings.

With the Bush government not being especially pro-Canada will raising "war" of a sort would making a stand on one issue cause more harm to the rest of the Canadian economy than necessary. On the other hand, is providing relief for the companies involved going to raise the US based softwood lumber producers case for the duties.

The softwood lumber dispute is a tricky issue for everyone. Clearly the US is wrong in the dispute, Canada's reaction will have long lasting consequences.

3 Comments:

  • Conservatives...might as well be americans...when it comes to US relations they are going to be on their fucking knees the entire time. Liberal, stepping up a bit.
    NDP, probably have the best attitude towards this issue. But when it comes to running a Government, they are a bunch of fucking tools.
    'Thats my two cents'

    By Blogger Blafo, at 1:07 PM  

  • This issue is not up to Canada to solve. The US needs to cut us some slack on this issue, because we need this trade more than they do.

    By Blogger Whatever, at 4:43 PM  

  • I'm taking this straight from the can.politics newsgroup, a post by pcourterelle

    Using energy as a weapon in the softwood lumber dispute is counterproductive
    on a number of fronts.

    First, restrictions and export taxes can only be applied generally and not
    targeted to those states who support duties on Canadian softwood lumber.
    This would cause higher oil, gas and electricity prices for all Americans,
    many of whom are supportive of Canada's position. How precisely will forcing
    the US to pay more for Canadian energy convince Americans to support
    Canada's softwood lumber case?

    Second, restricting energy exports is counter to WTO and NAFTA rules and
    would only further undermine Canada's trade position with the US and others.
    Canada cannot take the moral high-ground and demand the US abide by it's
    treaty obligations and at the same time take actions that undermined the
    treaty. Say what you want about NAFTA but it has levelled the playing field
    between the US and Canada by giving Canada a legal forum to counter US trade
    harassment and protectionism, by and large to Canada's benefit.

    Third, any attempt by the feds to restrict energy exports surely run afoul
    of provincial rights and concerns. This may be the most significant reason
    Ottawa is reluctant to wield the energy stick as it would cause havoc in
    Quebec, Ontario and BC, areas the Liberals are wont to anger in a minority
    government.

    Canada has three options for resolving the softwood lumber dispute, a
    problem that has plagued Canadian governments for almost two decades. The
    first is to find a legal remedy that forces the US to meet its treaty
    requirements. The second is to simply wait for a change in congressional
    makeup to something more favourable to Canada. (this goes both ways as
    Liberals have demonstrated over and over again they are not favourable to
    Washington). Third, negotiate. The options, and their chances for success,
    are the same for all three parties

    pc

    By Blogger Andrew, at 9:56 PM  

Post a Comment

<< Home