Saturday, August 27, 2005

The Softwood Lumber Dispute?


(image via kwaterskibros)

Granted, tucking into an international dispute involving "Canada," and "lumber" on a Saturday afternoon sounds, on the face of it, about as exciting as watching photosynthesis occur; bear with The Corsair, hear us out: there's method to the madness.

We have another diplomatic minefield, we need Karen "The Cleaner" Hughes. A Canada-US Trade War? It may be approaching The issue in dispute in this increasingly incendiary trade eventoid involves the United States and Canada and softwood lumber. According to the CBC News InDepth:

"The dispute is centered on stumpage fees - set amounts charged to companies that harvest timber on public land. Many in the U.S. see Canadian stumpage fees as being too low, making them de facto subsidies. A U.S. coalition of lumber producers wants the provincial governments to follow the American system and auction off timber rights at market prices. The U.S. responded by levying tariffs on incoming Canadian lumber in May 2002.

"... when the United States imposed duties of 27 per cent on Canadian softwood lumber, arguing that Canada unfairly subsidized producers of spruce, pine and fir lumber ... An agreement-in-principle to end the dispute was reached in December 2003. But it died two days later and the issue has been before North American Free Trade Agreement panels and the World Trade Organization several times. Rulings have usually gone Canada�?s way."

Canada, at present, is starting to talk of "retaliatory trade tariffs." This is odd because Canadiandipolomacyy is not especially overheated emotionally (The Corsair's father, Ambassador Louis Kayanda Mwangaguhunga, was part of a diplomatic delegation that formed the first diplomatic relations between Canada and Uganda in the 1970s)

But what does Canada do against a hyperpower who disagrees with a NAFTA panel's ruling that Canadian lumber exports "pose no threat to U.S. producers"? Won't an overly-emotional response work against their national interests? Of course it will. The $64,000 question is: Will Canada negotiate or retaliate? According to the Globe and Mail:

"(Prime Minister Martin) said that he is still planning to call U.S. President George W. Bush about the issue.

"He did not rule out consulting former prime minister Brian Mulroney, who maintains ties to the Bush family, or his negotiators for the 1989 North American free-trade agreement, two of whom, Paul Tellier and Gordon Ritchie, lead Canada's softwood-lumber negotiation team.

"International Trade Minister Jim Peterson said Canada is not planning a trade war, but simply responding to the U.S. administration's decision to continue duties on Canadian softwood lumber despite a NAFTA appeals panel ruling that the duties violate the trade agreement.
"'We fully expect the Americans to abide by the terms of the NAFTA, and that is the rule of law, and that is Canada's position. The rule of law must be respected,' Mr. Peterson said. 'That does not involve trade wars.'"

Beware, Mr. President: That the Chinese Dragon does not take this ... "fraying" of a post-Cold Waralliancee as an opportunity to pounce! As Joseph Nocera writes in The Old Gray Lady, "Pay attention to Canada"

(Now: was that really as boring as you thought initially?)

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