Canada must put aside the rhetoric and return to the negotiating table if the softwood lumber dispute with the United States is to be settled once and for all, U.S. Ambassador David Wilkins said Wednesday.
“What we don’t need is continued rhetoric to raise the emotional issues.”
It’s funny because Canada walking away from the table doesn’t raise my emotions…. it’s when the US continually ignores legal rulings from NAFTA and the WTO that have gone almost exclusively in Canadas’ favor that raises MY emotions.
And for the many Americans who read this blog, if you’re a homeowner… you should be angry too, because, according to the National Association of Home Builders, what’s bad for Canadian lumber, is bad for building a home in the US.
The link above is from another NAFTA ruling last year.
An April 30, 2004 North American Free Trade Agreement (NAFTA) panel decision stating once again that U.S. lumber producers are not threatened with injury from Canadian trade practices represents an important win for housing affordability, free trade, and millions of domestic lumber consumers who are already feeling the pinch of soaring prices.
“For the second time, a NAFTA panel has determined the domestic lumber industry’s injury threat allegations are baseless and contrary to law. We call on the Administration not to engage in any legal delays and to allow the implementation of this decision. It’s high time to roll back the 27 percent duties on Canadian lumber and end the hidden tax imposed on American home buyers and renters,” said NAHB President Bobby Rayburn.
In November 2004, the US Administration found another, different reason for their duties and taxes on Canadian lumber… I’m sure that once THOSE reasons are proved legally baseless, they’ll make something else up.
That is… unless Canada starts standing up for itself and it’s struggling forest industry and imposes some sanctions of its’ own.
Due to the intransigence of the US, Canada is, as far as I know, in a LEGAL POSITION to impose sanctions of its’ own.
How about a nice hefty tax on some of the oil, gas, water and/or electricity that the US buys from us every single day. Money from the tax can go directly to the employees and *Canadian Companies* layed off due to mill closures and to a tidy little fund to help develop new, alternative energy solutions.
I’m usually the one who advocates negotiation over retaliation… but there comes a point when you realise that the only way to beat the bully is to show just how weak he really is.
I’m uninformed on this issue. What justification does the US offer for imposing this tarrif? What is the rationale? I’m certainly not in favor of my government violating our trade agreements. Why are we renigging?
The American lobby groups basic position against the Canadian lumber industry is that our system of “stumpage” where the government takes a cut of the money for each tree felled is not sufficient and is therefore a form of subsidy by the government and is unfair in relation to methods used in the US. Basically they are saying that the Canadian government is unfairly subsidizing the Canadian lumber industry, which allows them to flood the US Market with cheap lumber. Even though they ignore the obvious fact that our lumber will always be cheaper because:
a) we have a ton of it across the country.
b) the exchange rate
Which is why the National Home Builders Association in the US is taking the more common sense opinion that overtaxing Canadian lumber can only be bad for US consumers.
In Canada, all undeveloped land is “Crown Land”, owned by the government and thus all Canadians… timber companies are granted licenses by the provincial government on portions of that land and then pay a “stumpage” tax for each tree cut.
I believe this is the main difference between the US (where Timber companies more-or-less “own” the land they use) and Canadian systems and likely what the US Lobby groups responsible for these duties want to happen in Canada.
NAFTA has ruled extensively and repeatedly that this basic assertion is false. The WTO has as well, though the WTO does not have the legal authority that NAFTA is *supposed* to have.
Subsidies seem to be the common problem for many trading partners. Agricultural subsidies seems to inspire the most “emotional” response from all sides but the lumber industry is obviously generating quite a bit of that as well. I hope an equitable outcome for both sides is soon. Canada’s perspective, in this case, appears to be on course with Nafta so I wish you all well.
Unfortunately, this has been going on since the last tentative agreement expired in 2001, so my patience for waiting for an equitable outcome is wearing mighty thin. I think it’s safe to say my feelings are shared by most other Canadians as well.
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