Wednesday, August 10, 2005

NAFTA 2, US 0: Time to Shoot the Ref? 

Talk to nearly anyone here in Canada, and #1 on the list of grievances against the United States--higher than Iraq, higher than mad cow--is the imposition of duties on imports of Canadian softwood lumber. Hypocrisy being the U.S.'s greatest export, it should come as no surprise that the taxpayer-subsidized timber industry and its shills in the Bush Administration have been objecting to "unfair" competition from Canadian softoods, flouting the North American Free Trade Agreement to block free trade in it. Negotiations over the issue for years having produced nothing but the usual my-way-or-the-highway instransigence from the Bush Administration, Canada finally took the U.S. to court over the issue. Today it won:
Canada is claiming a major victory in the softwood lumber dispute with the United States following a key ruling by a NAFTA panel and is demanding quick repayment of billions of dollars in penalties collected by Washington.

An extraordinary challenge panel under the North American free-trade agreement has dismissed U.S. arguments that an earlier NAFTA ruling in favour of Canada violated trade rules.

Analysts have previously said such a win could be the final blow to the U.S. industry's claims that Canadian producers are unfairly subsidized.

Trade officials said they hope Wednesday's decision will hasten a negotiated end to the dispute that began more than four years ago and has seriously threatened Canada's $10-billion softwood-export sector.

“We are extremely pleased that the (panel) dismissed the claims of the United States,” Trade Minister Jim Peterson said in a statement. “This is a binding decision that clearly eliminates the basis for U.S.-imposed duties on Canadian softwood lumber.

“We fully expect the United States to abide by this ruling, stop collecting duties and refund the duties collected over the past three years.”
(via The Globe and Mail)

Canadians have such a puckish sense of humor, as the article goes on to make clear:

But Washington is insisting that more negotiations are needed before the long-running dispute can be wrapped up.

“We are, of course, disappointed with the (panel's) decision, but it will have no impact on the antidumping and countervailing duty orders,” said Nenna Moorjani, press secretary for U.S. trade representative Rob Portman.

“We continue to have concerns about Canadian pricing and forestry practices. We believe that a negotiated solution is in the best interests of both the United States and Canada, and that litigation will not resolve the dispute.”

Mr. Peterson and his U.S. counterpart have resumed talks aimed at negotiating a solution to the softwood dispute, which has already seen Canadian producers pay about $5-billion in antidumping and countervailing duties.

A trade official said the battle may not be over, because the Americans still have some options outside NAFTA, including a formal constitutional challenge.

Canada has been fighting the combined countervailing and antidumping duties through legal channels as well as in high-level negotiations since Washington began collecting duties in 2002.

Although Canada has won many of legal battles under the NAFTA, as well as at the World Trade Organization, that has had little real effect in the dispute.

The Bush Family Motto: What's Mine is Mine, What's Yours is Mine, and the Rest is Negotiable. Look for sudden resignations from the NAFTA panel in the weeks to come, followed by a third appeal from the United States. Either that, or Mr. Thompson finds a horsehead in his bed. Nobody messes with Georgie "The Smirk."

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