NAFTA Ruling on Softwood Lumber

[farmers_son]

Alberta is on record as saying that oil and gas are not to be used as a bargaining chip in trade disputes between Canada and the U.S.

See:
http://www.edmontonsun.com/News/Alberta/2005/08/14/1172759-sun.html

I am sure that Alberta is aware that while the provinces control their resources within the province, the federal government always has the final say over exports out of the country.

Prior to CUSTA coming into effect trade between the U.S. and Canada was tariff free with only a few notable exceptions. For example broccoli had a 10% tariff and tomatoes had a seasonal 5.1% tariff on imports. Today after 17 years of CUSTA/NAFTA we see tariffs on Canadian wheat of 14.15%, softwood lumber of between 19.3% and 27%. When you consider the cost of the requirements Canadian live cattle must meet into order to enter the U.S. and the difference in price between Canadian and U.S. live cattle an argument could be made that there is a non tariff barrier on our cattle amounting to as much as 13.5%. For this we traded off control of natural resources?

In 1988 when the Mulroney government came to the Canadian public saying we should support CUSTA the reason given was the dispute settlement mechanism contained within CUSTA. When the U.S. ignores the ruling of the Extraordinary Challenge Committee of the North American Free Trade Agreement haven’t they effectively killed NAFTA? There is nothing left to save.

[FarmRanger]

It could be argued that free trade has helped to reduce the extent to which we been tariffed into US markets. The dismal diplomacy displayed by previous Liberal governments likely had more of a negative effect on US attitudes towards us and consequent trade problems that followed. It likely wouldn’t leave you feeling generous towards a country that calls you names like “American bastards”, and the offending MP isn’t even disciplined in any visible way by the ruling Liberal government.
Cowman is right about Mulroney, at least trade relations improved under his government, but the Left detested his relationship with the Americans, and he was vilified for it. Considering the level of corruption in Chretian’s government, its baffling to me that Mulroney is the one made out to be a crook.

[madcow]

cowman ,from where I'm sitting (N.S.), separation means smaller, less effective pieces in a situation where we are already being bullied. We need a stronger federal government,maybe with a more "farmer" attitude. The balls to deal with a much larger trade bully and the unwillingness to quit until it's right. You may have a point that the trade of primary products like cattle,grain,lumber or fish may just be peanuts in the over all trade picture. But the damage done here to us ' primary producers' has a "trickle up"effect in weakening the overall economy.
JD4ME had it right- "Amazing how when the US loses a ruling they still want to negotiate but if the shoe was on the other foot they'd be saying "nope a deals a deal and the panels ruling is final ". The poor little rich kid attitude . And f_s ,Canada may have been more successful pre NAFTA in dealing with issues for primary production. We need a federal government with balls enough to pursue the notion that the 'F' stands for FAIR in NAFTA. And we still have the oil,natural gas and electricity to dangle as a carrot or use as leverage.We have been bullied as a nation long enough and it's not just the primary producers who are hurt ,it affects us all !

[cowman]

Read a very interesting piece in the Globe and Mail yesterday dealing with Canadas' trade surplus. Apparently we have a trade surplus of over $5 billion dollars. Our total exports are $37 billion and our imports are around $32 billion. America has a trade DEFICIT of $57 billion!
It was also interesting to note our oil exports amounted to $2.4 billion in June of 2005? This would imply that we are probably pushing close to $24 billion in export oil...not to mention how many $billions in gas? Now consider what might happen if America decided to buy their oil and gas somewhere else? Not to hard to see we would be bankrupt within days?
It is also very apparent that the western provinces are accounting for a huge portion of the real wealth creation in this country? I wonder why anyone would want to be treated the way we have, while defacto we are financing this country?
Time for people to take a real hard look at the economics of this country and consider their options?
Softwood lumber, wheat, and cattle(to the US)...what portion of the export pie do they bring in? Is it important enough to even register in the big picture?

[madcow]

FarmRanger,, I agree with your take on that,but,Canadian political history has a bit of a time delay,Chretien's legacy is still in its refining/ defining stage.He'll be our crook,,,,,,,,,later,,,,,,,,,,

[JD4ME]

In regards to the volume of trade goods currently being sent to the US the ones that are being slapped with tarriffs and are in dispute wheat,softwood lumber at the fore (for us in the west anyhow) Klein said during a comment period at the recent premiers conference in Banff. They amount to around 4% of the trade numbers with the US.

However I go back the sentiment voiced by many premiers of frustration over the current lack of a binding dispute settlement body for NAFTA and the need for one that can be outside political interference.
If you are concerned as I am about the need for a revamp of NAFTA to include this make sure you take the time to push whatever buttons you can to keep it on the minds of the politicians so maybe we can get something like this happening.
Be it through farm groups, provincial MLA's office or your local Ag. service board(in alberta) make sure it's got some traction.

[JD4ME]

I would think that we do have some leverage with the US on the energy side.
Lobbying provincial governments may help put the pressure on the feds to work to get some amendments to NAFTA but if it won't benefit the US we will be wasting our time.

[farmers_son]

The ruling of the Extraordinary Challenge Committee should have been the final word. However negotiations on softwood lumber are scheduled in a couple of weeks. Hopefully Canada will not send representatives to these meeting and instead insist on the Committee’s decision being upheld.

NAFTA and before that CUSTA was an all encompassing trade agreement between Canada and the U.S. It was a negotiated agreement that took into consideration all trade between the countries. The U.S. cannot continue to enjoy the benefits of the overall trade with Canada but separately insist on negotiating commodity specific agreements.

I believe what the U.S. is asking for is Canada to agree to limit exports of softwood lumber to the U.S. Canadian cattle producers should be under no illusion that the U.S. will at some point attempt to do the same with live cattle and beef.

[daretodiffer]

With all the snorting and stamping of feet over the U. S. failure to live up to free trade rules and illegally tax our exports, I wonder when the Canadian collective will get up the nerve to use Article 1905 of NAFTA. This allows Canada to start a bilateral consultation process on the grounds that the U.S. is violating the Agreement. A very likely win, would give Canada the right to withdraw benefits that it extended to the US under NAFTA. One of these benefits we could withdraw is the provision that obligates Canada (and Alberta) to share its energy resources with the U. S. in times of shortage. Another benefit is the priviledge which allows U. S. corporations to sue Canadian governments for damages as they threatened to do when we tried to stop allowing a harmful additive to be put into transportation fuel. We are not powerless with the elephant. We do have alternatives. Its time we had the guts to openly consider them.

[cowman]

While it is all right to speculate about how we can bring the Americans around by threatening to cut off the oil and gas, it is maybe time to look at reality? The fact is oil and gas are what is keeping this country solvent...and yep it is America who is buying it!
In the big picture our cattle/beef trade hardly registers in comparison with our energy exports.
I also find it is usually people who have no stake in the energy business who are real eager to cut exports? Of course this is a case of hiding their heads in the sand because the fact is oil and gas affect everyone...whether we like it or not?
We certainly don't want some idiot government interfereing in a market that is obviously working? As far as the provision that a country can't impose a different set of rules for domestic use, compared to how it treats its NAFTA partners: Is this a bad thing? Have you ever heard of the NEP, where the Canadian government put export taxes on oil and gas, for"the good of Canada"? Well it certainly wasn't good for my part of Canada! Or for me personally! But sure was handy for the eastern consumer, because he got subsidized energy...at my expense!
Here is a fact: The oil and gas I own are simply mine. I don't want my own government undermining my best efforts to make money on them. The whole idea of phoney government restrictions on my gas and oil are nothing less than outright theft! There is no reason Canadians can't buy it? If an American will pay X amount of dollars for it, then let the Canadian consumer step up to the plate and match it?...It's called free enterprize?