Posted on 08/16/2005 12:09:54 PM PDT by proud_yank
Canada suspends softwood talks with U.S. Last Updated Tue, 16 Aug 2005 13:47:58 EDT CBC News
Canada has suspended softwood lumber talks with the United States to protest America's refusal to heed a NAFTA ruling that sided with the Canadian position. A scheduled meeting that was to start the next round of talks in the dispute has been cancelled, with no hint of when talks might resume.
"Following consultations with provincial governments, and in light of the U.S. response to the Aug. 10 decision of the NAFTA extraordinary challenge committee, the government of Canada has decided to not proceed with the negotiations planned for next week," International Trade Minister Jim Peterson said in a news release Tuesday.
"The government of Canada will continue to consult with industry stakeholders as we consider all possible options for promoting Canada's interests in this long-standing dispute."
Peterson advised U.S. Trade Representative Rob Portman of the development.
Last week, the extraordinary challenge panel dismissed Washington's claims that Canadian softwood exports are subsidized and damage the U.S. lumber industry. Canada immediately called on Washington to return about $5 billion collected from Canadian companies. The Americans refused, saying the ruling didn't end the matter because it did not deal with a 2004 decision from the U.S. International Trade Commission which supported the American case.
Peterson has told Portman that Canadians are outraged by the refusal to follow NAFTA rules.
Finance Minister Ralph Goodale said Washington has to understand that "Canada takes this very, very seriously."'
NDP Leader Jack Layton has said Canada must play "hardball" with the Americans by imposing export charges on oil and gas. Otherwise, he said, the United States won't take the issue seriously.
Canadian producers sell about $10 billion worth of spruce, pine and fir lumber a year to the U.S. home-construction and renovation sectors.
Never say never. If you don't think this is one issue that almost ALL Canadians are in agreement upon, left and right, think again. We on the right are pissed off that the U.S. is not keeping their word, and that we are being taxed unfairly. The left hates America regardless. And the centre is upset because this is making them look bad.
The US agreed to abide by the terms of the NAFTA treaty. This ruling is in line with NAFTA.
If we don't like it, we can withdraw from NAFTA. We shouldn't simply ignore the ruling because we don't like it.
Meanwhile...raw logs are still exported in higher quantities than the finished product "softwood lumber" and no one is saying Jack S about that...
Easy fix, frame with steel, don't send it to Asia..keep it here, or, buy the finished product (logs from Canada) milled locally in the USA...
I think that Bush is just playing hardball with the Canuckistanis. Many people here view Chretien and Parrish as icons for their anti-American policies. Bottom line, in my opinion, 'Screw with the bull, you're going to get horned'. They got what they deserved.
You can laugh at our military all you like. Doesn't distract from the fact that you aren't keeping your word. Period.
Our military is a problem, and we on the Canadian right are the first to point that out. But don't confuse or change the issue like a leftie. Breaking your word is breaking your word, and mocking our submarines doesn't change that.
Canadian conservatives are some of the most enthusiastic pro-American people out there. But we believe that keeping your word is a fundamental part of an orderly, well-functioning society. And breaking your word to us, when you've signed the agreement, and encouraged us to to sign it, that's one of the few things where we will get angry with America over. And rightly so.
Unless you don't believe that you should abide by agreements that you still keep and belong to?
Thank you. That's my position exactly. I don't like NAFTA either. You can withdraw now, if you like. But don't ignore the rules and the ruling just because you don't like them.
Web-exclusive comment
Chuck Gastle
Only a softwood-lumber settlement will buy trade peace
By CHUCK GASTLE
Monday, August 15, 2005 Updated at 1:59 AM EDT
Special to Globe and Mail Update
Even though Canada has won "Softwood Lumber part IV," we should still negotiate a settlement. If the United States persists in refusing to return the almost $5-billion in interim duties already collected, the North American free-trade agreement dispute settlement mechanism has been defeated. The fact that Softwood Lumber V lurks just around the corner, indicates the serial jeopardy that exists in anti-dumping and countervailing duty law.
Case after case after case can be commenced. As a result, the North American softwood-lumber market represents a case of "managed" and not "free" trade, and Canada will only be permitted a certain percentage of the market before duties are imposed.
Canada has won the dispute because a NAFTA extraordinary challenge committee - a limited appellate body - has confirmed that Canadian exports represent no injury or threat of injury to American softwood producers. This ends the dispute. Or it is supposed to.
Now Canada is being forced to commence action in the U.S. Court of International Trade to force the return of the interim duties. A further appeal to the U.S. Federal Court of Appeal will likely be necessary, and possibly to the U.S. Supreme Court.
This litigation could last at least another two years. The NAFTA binational panel mechanism was designed specifically and intentionally to replace the Court of International Trade that was perceived as being too deferential to the U.S. Department of Commerce. What a remarkable admission of failure: Canada must now turn to U.S. courts to try to enforce NAFTA.
The United States relies on Section 129 of the Uruguay Round Agreements Act that allows the International Trade Commission to modify decisions it has made if the World Trade Organization determines that a decision is WTO consistent. The International Trade Commission (that finds injury) modified its decision in November, 2004, under this authority. The United States argues that the entire NAFTA hearing is now moot as the game has been changed - NAFTA has chased the old decision when the new one rules.
If international trade law means anything, Canada should eventually be successful in having the duties repaid. If it is unsuccessful, NAFTA's dispute-settlement mechanism is a joke. But don't expect Canada to invoke its right to terminate NAFTA on six months' notice. Our economies are far too integrated to even contemplate such a step.
Besides, even if the duties are returned, a settlement still should be negotiated. Softwood Lumber III took three years to resolve. Softwood Lumber IV has taken four years thus far. The trend would suggest that Softwood Lumber V will be at least as long and it could be commenced soon after the current iteration expires. The Department of Commerce will soon be able to impose interim duties once again.
So what will a settlement look like? Canada will impose an export tax on almost all softwood-lumber exports from Canada. A 15-per-cent duty was imposed during the first softwood-lumber agreement of 1986. In 1995, a five-year agreement was reached imposing a $50 charge beyond 14.7 billion board feet, and a charge of $100 per thousand beyond 15.35 billion board feet (shipments in 1995 being 16.2 billion).
It is likely that any settlement agreement will result in an export tax, with the United States calling for a 19-per-cent tariff in 2002. At least the duties will be collected by the Canadian government and not by Washington. The duty will be eliminated if the provinces make changes to their forest-management policies. The provinces will likely have to move away from their current forest-management programs to ones that are market-based, similar to those in the United States.
There has always been an esoteric argument as to whether NAFTA truly represents a compromise of sovereignty. It is my view that the agreement does so in circumstances where domestic policy changes are necessary even after clear-cut victories.
The sad reality is, American house buyers have been held hostage to a well-organized industry and antiquated trade-remedy weapons that protect producers and not consumers. One might think that producers should be protected when confronting the trade threat from China. But remember, 40 years ago, competition law (trade rules within a country) and anti-dumping/countervailing duty law (trade rules between countries) shared the same producer-welfare orientation. Competition law has evolved to protect consumers - but antidumping/countervailing has not. There is no chance that these mechanisms will ever change.
The victory in Softwood Lumber IV must be seen for what it is: Canada's negotiating position has been enhanced and it is time to negotiate a settlement that will minimize interference in the market.
Chuck Gastle is a partner at Bennett Gastle P.C., a litigation and international-trade boutique law firm.
Firstly, Chretien and Parrish don't represent all Canadians. Chretien won a majority with about 37% of the vote.
Secondly, Bush is playing hardball if you what you mean by hardball is "IGNORING THE RULES THAT YOU DICTATED IN THE FIRST PLACE AND ENCOURAGED US TO ABIDE BY".
I back the Republicans and I support America. But I do not support lack of integrity. Period. End of story.
You don't like Parrish or Chretien, say so. I doubt you hate them more than we Canadian conservatives. But don't change the story here. Don't bait your allies. Don't try to weasel out of the fact that this is blatantly ignoring the rules that you yourselves made and strongly encouraged Canada to abide by.
Furthermore, why do Canadian conservatives deserve this?
These duties are nonsense, anyway. They're just a sop to lumber interests in the US.
At the end of the day, the rest of us in the US are subsidizing the American lumber industry even though we could get the same lumber from Canada at a lower cost.
It's welfare for American lumber producers. Nothing more.
Good article.
The funny thing is, lumberjacks and lumber company owners in Canada are probably a pretty conservative, pro-America lot.
You might very well be right. I suspected this would happen for a long time now, and I am adamantly against NAFTA for a number of reasons. But whether we end it soon or not, America should pay back the money it unrightfully took from us. It's not a lot to them and the principle of the act is important. They made the agreement, under Reagan and Bush, and pushed Mulroney to sign. Now it's time for them to live by the agreement they made.
You're damn right they are. ;) In fact, many of their ancestors WERE American.
I do not understand why any Canadian, except a socialist like Jack Layton, seriously thinks linking the softwood dispute with energy in a fight with the USA is a good plan.
It would be a very serious shot across the bow of the Americans and I assume they would respond strongly. Albertans in the energy sector would pay dearly, again.
And for all the talk in Ottawa about playing "hardball" the end result will likely be a softball aimed at the poor Canadian farmer.
I also think the Liberals won't be calling an election with the CBC out on strike.
That sounds like a very biased opinion.
Not very multicultural of you.
Also, what do you mean by Mulroney being pushed to sign NAFTA?
How was he pushed?
I think you are right on all points. But it's a matter of principle that America upholds their end of the bargain.
I'd hate to have soft wood.
Five billion dollars is a lot of money, I was being glib and I offer you apology. But we're a much smaller country and the unexpected loss of five billion dollars hits us hard. America is 10x our size, and softwood lumber is one of our biggest imports, besides oil and and metal.
but...
a) I am only in favour of multiculturalism so long as it helps promote Western values, and mostly adopts Western values. Sorry. Just the way I feel. ;) I'm down with shish kebab, but I wouldn't kill support a man killing his sister because she slept with her boyfriend. I can dig the Doors, but I do not think that doing drugs is a victimless crime or morally acceptable.
b) Mulroney and the Canadian businesses were encouraged by American businesses and the Reagan and Bush Sr. administrations to join NAFTA. To be fair, they raised some good points, but I believe the majority of Canadians were actually opposed to it. Including yours truly (though he was young at the time).
I think we all wood. And I think our lovely FReeperettes would be most disappointed as well.
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