NAFTA Ruling on Softwood Lumber

[farmers_son]

Yesterdays announcement of a NAFTA win for Canadian softwood lumber producers is getting the thumbs down by Washington who say they are going to ignore the NAFTA ruling and continue to impose tariffs on Canadian lumber which have amounted to billions of dollars.

See:

http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR2005081001448.html


It is not very much of a stretch for Canadian beef producers to feel they get much the same kind of protectionist treatment from Washington. What is the point of NAFTA if Washington just makes up their own trade rules?

If we were being realistic about it, the only reason we have live cattle trade with the U.S. was not based on any consideration from NAFTA but because the U.S. ended up in the same boat as us with their own BSE cow and suddenly it is OK to ship live calves, but still not cows, throughout North America.

Top level government people in this country have pointed out that NAFTA has not worked to the advantage of primary producers who have found themselves subject to continued trade harassment at the hands of the Americans.

It is high time governments acknowledge that NAFTA has not worked for Canadians and scrap it. While the concept may have been well and good, the reality of NAFTA did not live up to the promise.

[JD4ME]

Probably the most galling thing to me if I have been informed correctly about all this is we the farmer are having to fight these trade battles against the US government and the protectionist elements down there out of our own pockets. 10's of millions out of prarie producers pockets to fight this. And before it becomes a get rid of the board thread don't think for a minute that this trade harrassment would stop after the board is gone.

[JD4ME]

Interesting comments from the premiers conference this evening about Nafta being affected by "political" decisions outside the rule of law of NAFTA and the need for a new binding dispute resolution methodology.

[farmers_son]

I was reading a news piece on the Provincial Premiers meeting with U.S. Ambassador David Wilkins.

Washington is saying the the unanimous NAFTA ruling was largely irrelevant, and insisted more negotiations were needed before the dispute could end.

Wilkins said the U.S. maintains the only way to end the softwood trade war is through a negotiated settlement.

"Without a negotiated settlement there will continue to be a myriad of lawsuits as there has been," said Wilkins.

It will be no different for beef and live cattle. The lawsuits and trade actions will continue.

Canada has put a lot of resources into the NAFTA basket of eggs, too many it seems.

[JD4ME]

Amazing how when the US loses a ruling they still want to negotitate but if the shoe was on the other foot they'd be saying "nope a deals a deal and the panels ruling is final"

I do disagree with you somewhat about the beef though despite the fact protectionist groups will continue to agitate I believe that the US government realises that the only hope they have now of ever regaining any export trade with their former major pacific rim customers is to put on a good "show" and continue to import beef from Canada. It simple comes down to a question of what they need in the US for their purposes. Wheat nope, softwood lumber not really though it affects their housing costs, cattle up until the washington holstein that market would have not opened for another 3 years no matter the lip service. Look at he games they are playing with wheat, the question really is what commodity or industry is next, .

[farmers_son]

Trade resumed in live cattle because the U.S. preceived it to be in their best interest to see it happen, not because of any feeling of obligation to live up to their NAFTA commitments or any sense of fair play.

[Willowcreek]

If you get a move going to rescind NAFTA I think you could come up with a majority following in the states....Even R-CALF would support that move...

[cowman]

Before anyone gets gung ho on scrapping NAFTA you'd better pause a moment and consider the implications?
The soft wood lumber deal, the cattle deal and the grain deal are peanuts compared to the amount of trade that goes on between our two countries? I believe Canada and the USA are the biggest trading partners in the world?
Quite frankly the softwood deal needs to be negotiated? Just like the heavy "green" subsidies to US grain need to be negotiated? Both of these deals fall within the NAFTA law...but really are not fair and don't reflect the "intent" of free trade, in my opinion!
You want to scrap NAFTA and lose the most favorful trading position in the world...with the most lucrative market in the world? Even the Liberals aren't that dumb!

[farmers_son]

Obviously NAFTA is not going to be scrapped. But I think there is little question that NAFTA has not worked to improve the lot of the primary producers of this country whether are talking lumber, fish, agriculture, steel (Stelco is bankrupt). The original agreement, CUSTA, had a provision that would have seen political interference eliminated from trade between the U.S. and Canada but that provision disappeared when the NAFTA agreement was signed. Now we find ourselves subject to the whims of politically influential groups in the U.S. like cattle and lumber producers. Trade between the U.S. and Canada does seem to be for the most part going quite well but not for the primary industries.

I do think that Canada was more successful in negotiating access and agreements for our primary goods, live cattle and beef, lumber, salmon etc. in the days before NAFTA when we used the threat of turning off the flow of oil to the U.S. as a lever. That was the best way to level the playing field. Now our negotiations revolve around NAFTA rulings, WTO and the U.S. courts and those provisions are not working real well for us. If nothing else, the threat of turning off the taps worked a lot faster.

Trade in live cattle and beef between the U.S. and Canada are a prime example of how NAFTA is not working. CUSTA was signed in 1988, it is seventeen years later and how firmly has the concept of a North American cattle industry been established? Whether we are talking MCOOL or BSE U.S. courts and law makers are still pandering to a notion of a U.S. herd that keeps out competing imports, especially from Canada.

I do not think anyone can call NAFTA a success by pointing to the $billion plus trade that takes place every day across the 49th parallel while ignoring the ongoing U.S. trade harassment at the primary industry level.

Cowman: It is not negotiating when one party has a gun to the other parties head. You talk about green subsidies to grain but it is the U.S. that has countervails on Canadian wheat. If Canada is unable to use oil as a weapon to counter U.S. trade actions then I question what we have to negotiate with.

[cowman]

Well for one thing Canada could come up with "green subsidies" to off set the US ones?
Do you ever wonder why groups like R-CALF are so upset about Canadian imports of cattle? Well maybe it has something to do with the steady stream of liners going past their doors to the American packing plants? Now before the death of the CROW Canada wasn't able to export a lot of cattle, but due to our worthless government not stepping up and fighting the grain wars, every man and his dog got into cattle and hogs, thus creating a surplus of livestock that needed to be exported! Without a doubt the CROW was not "green" but that doesn't mean it couldn't have been replaced with a program that was? The fact is the Canadian government was just too cheap to step up to the plate and save the prairie grain farmer?

Couldn't afford it you see? Too busy wasting money on essentials like bilingual service, bribery and corruption, CWB, gun laws etc.!
If there was one thing Mulrooney got right it was free trade. It isn't perfect but it did start our trip, as a region, to not be a colony of the golden triangle?
A recent poll suggests fully one third of westerners now feel their only hope is to seperate and personally I find that very exciting! When you factor in all the provinces with a "socialist bent" I wonder what that percentage might be in Alberta? Or Calgary?
Recently the Calgary Sun reported that a growing number of major Calgary businessmen now favor seperation. Hopefully in our lifetime?

[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,,,,,,,,,,