Sigh, Back to Square One

Local interests will always prevail. Powerful lobbies by one industry or another, pressing government to support their cause will always win out. Despite assurances to the contrary, governments everywhere succumb to the loud plaints and blandishments of their local constituents, in protecting employment at home. Keeping out the products - even in a supposedly 'free trade' economy - of those dastardly product-challengers abroad.

And so it has always been, and so will it continue to be. Canada and the United States are back to their baleful bickering over forest products. We could see it coming; an unstoppable locomotive of protectionism, blame and xenophobia. Canada has been placed on notice through the U.S. Trade Representative Ron Kirk informing that a 10% imposition of customs duty on Canada's softwood lumber imports has become a fact.

And just when we thought we had finally achieved a working agreement. Forest products have always represented a sore point between the two countries. With the U.S. insisting that Canada has an unfortunate habit of subsidizing its industry, whereas the United States does not; untrue on both counts. But with jobs fast fading in the U.S. due to the recession, anything goes.

A trade ruling that came down earlier in the year through an international arbitration court that ordered Canada to impose a ten-percent tax on softwood shipments from Ontario, Quebec, Manitoba and Saskatchewan, ostensibly to compensate the U.S. for what is claimed to be a miscalculation of export quotas, had elicited an offer from Canada to pay up $47-million.

The arbitration panel was to have ruled on whether it would consider that settlement offer to be acceptable. The impatient Americans decided not to wait for the ruling, and instead to impose the tariff. They're tough adversaries; no one fools around with the United States. Free Trade Agreement? Well, anything Congress rubber-stamps trumps any North American Free Trade Agreement.

Trade Minister Stockwell Day took issue with the imposition of this additional tariff, believing the payment offer sufficient, that it "met the spirit and letter of the tribunal ruling". "Washington is a pretty active place these days and it's a situation where you have to tread very carefully with what you're doing under any trade agreement with the U.S." sighed John Allan, spokesman for the Canadian Lumber Trade Alliance.

Yep.