'Attacking' the States, Knocks on Wood

My eye caught the following hysterical (all 3 meanings of the word apply) headline on the front page of CNN.com:

"Canadian PM keeps up attack on U.S." (note that the headline appeared as quoted on the front page of CNN, but when you click on the link it leads you [and always did] to the full story with the much less eye-popping headline of 'Canadian leader ready to debate U.S. on trade').

Much to my chagrin, the story was not about an angry Paul Martin lobbing poutine across the Peace Bridge, but rather about the interminable softwood lumber dispute.

What followed for me, in first reading the CNN take on Martin's "attack", and then reading some background on the dispute from the CBC website, seemed to be a classic example of perspective (or perhaps audience?) influencing reporting.

Read the CBC background I've linked to above if, like me, you've finally decided to learn some of the details about the dispute (biased or not, there are plenty of facts to chew on).

Here is an excerpt of CNN's take:

OTTAWA, Canada (Reuters) -- Canadian Prime Minister Paul Martin kept up his attack on U.S. trade policy on Monday as he prepared to meet Condoleezza Rice later in the day on her first official visit to Canada as U.S. secretary of state.

"Friends live up to their agreements," Martin said in calling on the United States to respect a ruling under the North American Free Trade Agreement on Canadian exports of softwood lumber.

When Martin took over as prime minister in December 2003, he pledged to improve relations with the United States, but he has taken off the diplomatic gloves in criticizing the U.S. position on softwood."

Good relations with the United States does not mean that the prime minister of the country should not defend Canada," he said.

Good for you, Paul, you scrappy devil.

Now what is the U.S.' position, again according to CNN?

The U.S. position has been that while NAFTA has ruled in Ottawa's favor, the World Trade Organization has ruled for Washington, saying that subsidized Canadian lumber was threatening U.S. producers.

But Martin said NAFTA "trumps" the WTO. Martin brushed aside a question as to whether he was trying to win domestic political points ahead of a general election expected next April.

Back to the CBC:

Two weeks later, a WTO panel concluded that the U.S. wrongly applied harsh duties on Canadian softwood exports. The panel also found that provincial stumpage programs provide a "financial benefit" to Canadian producers. But, the panel made it clear that the benefit is not enough to be a subsidy, and does not justify current U.S. duties.

Wait a second - CNN claims that the WTO "has ruled for Washington" while CBC suggests otherwise. I am left to piece together the following:

• the U.S. claims that our stumpage fees (fees charged to companies that harvest timber on public land) are too low, and are defacto subsidies.
• they have chosen, in retaliation, to impose harsh tariffs (18%) on incoming Canadian lumber.
• many jobs in the Canadian Forestry industry have been lost (at least 15,000 in B.C. alone)
• NAFTA has clearly ruled in favour of Canada.
• the WTO has ruled that, although U.S. lumber producers are threatened by Canada's provincial stumpage programs, Canada is NOT unfairly subsidizing its lumber (i.e. the stumpage fees are not too low)
• the U.S. tariffs are unjustified, as per NAFTA and the WTO.
  

Now that I've single-handedly gotten to the bottom of the issue, it's time for the States to show us the money!

UPDATE (October 29, 2005):

Commenter 'nomennovum' quite correctly pointed out that, according to CTV news, and since the previous rulings which I refer to in the post above, the WTO has ruled that the United States did comply with international law when it imposed those billions of dollars of duties on Canadian lumber.

According to the CTV article dated August 31, 2005, this decision comes from a confidential ruling that won't be made public until "later this year". While Canada may very well appeal, what this means to me for the present is that the States has merely broken their own agreement with us under NAFTA (as per the NAFTA panel), but have not been found to have acted illegally from an international perspective. From the article:

Toronto trade lawyer Lawrence Herman said the WTO and NAFTA rulings aren't so much contradictory as "mutually exclusive."

NAFTA panels determine whether a country is complying with its own laws, while WTO panels check adherence to international trade laws, he told The Globe.

I intend to write another post about this ongoing dispute when the ruling has been made public (or before then if anything interesting happens). Stay tuned.