Tuesday, October 25, 2005

'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.

9 Comments:

At 9:58 a.m., October 26, 2005, Blogger Peter Dodson said...

Good post. My fear is that we will never see that money because too many Canadians don't want us to piss off the Americans. Don't poke the elephant with a stick so to speak. Why aren't Conservatives speaking up on this issue though? How many people in B.C. lost their jobs as a result of this?

 
At 10:20 a.m., October 26, 2005, Blogger Nomennovum said...

Simon,

You screwed up big time here. Your reference is to a now out-of-date cbc news item (dated Aug. 15, 2005).

The WTO did rule in favor of the US in late August.

See: www.ctv.ca/servlet/ArticleNews/story/CTVNews/1125405821523_131/?hub=TopStories

This is from Canada's own CTV (dated Aug. 31, 2005).

"Canada's on-going battle over softwood lumber has dealt what appears to be a serious setback. The World Trade Organization has ruled that the United States did comply with international law when it imposed billions of dollars of duties on Canadian lumber."

Bad post. (Don't get too hysterical now.)

 
At 10:27 a.m., October 26, 2005, Blogger Nomennovum said...

This is why gloating* is so bad, Simon. It often makes you look … well …

________________

* You do remember your quote. Don’t you? “Now that I've single-handedly gotten to the bottom of the issue ….”

 
At 10:35 a.m., October 26, 2005, Blogger Simon said...

Nomennovum,

Thanks for the post and the link. I'll check into it. As I quite clearly indicated in my post, for all to read, I was not very familiar with the details and the various rulings. But thanks for your condescending tone which no doubt hammers that point home even further.

As for what you call 'gloating', it was actually a bit of innocent, even self-deprecating humour meant to highlight that I hardly covered the issue in-depth with this post.

Don't get hysterical, now.

 
At 10:42 a.m., October 26, 2005, Blogger Nomennovum said...

You're right. I should have saved the condescension for later (if needed). Couldn’t help myself under the circumstances, and self-deprecating humor (or humor of any kind sometimes) does not come through in the written word.

 
At 10:51 a.m., October 26, 2005, Blogger Simon said...

Condescension is never needed if you have a good point to bring up.

Next time I try to use self-deprecating humour (it's inevitable) I'll try to remember to make it more obvious.

 
At 10:53 a.m., October 26, 2005, Blogger Nomennovum said...

Now, no need to patronize. I may be forced to troll through your other posts.

 
At 11:00 a.m., October 26, 2005, Blogger Simon said...

Uncle! Uncle!

Actually I didn't mean to patronize (you're right though, it appears that way as written).

I truly believe that condescension is not necessary if you have a good point (for instance, you probably had a good point with your CTV link which I plan to check out so you therefore could have simply brought it up and left it at that). Don't get me wrong, I'm occasionally guilty of condescension too like most of us are. Something everyone who blogs or trolls should work on, IMO.

And I was being serious that I should make it more obvious when I'm being self-deprecating as I agree it is tough to get across through the written word.

No need to troll the rest of my posts now, right?? :)

 
At 11:39 a.m., October 26, 2005, Blogger Nomennovum said...

I shall resist the temptation!

 

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