The Softwood War:
NAFTA Ruling Upholds US Duties, Leave
The provincial and federal governments may be
celebrating, but last week’s ruling by a secret North American Free
Trade Agreement tribunal upholding US countervailing duties on Canadian
softwood lumber, but it’s no good news for the economy, say labour and
The panel agreed with the US government’s position that
governments in Canada in fact subsidize the forest
industry through low stumpage rates, and said the countervailing
measures are an appropriate response. The panel’s decision also added
support for a ruling by a similar tribunal of the World Trade
Organization earlier this year.
However, it did say that current 30 per
cent import duty is too high, claiming that the US government erred in
its calculation of the rate by basing it on US lumber market prices
without considering Canadian market conditions. It has ordered the US government to re-calculate
the rate. This call has some Canadian politicians, at both the federal
and provincial levels, calling the decision, at least in part, a victory.
But this is little consolation for BC’s
forestry workers and communities already struggling under the rule of
the duties and the mass layoffs caused by the BC Liberal government’s
IWA-Canada President Dave Haggard expects
this ruling will not bode well in the continuing softwood lumber
negotiations between the Canadian and US governments and corporations.
Those talks have been at a standstill.
“At this stage, the thinking
in the industry is that any deal is a good deal,” said IWA president
Dave Haggard. “But we all have to keep in mind the ramifications of any
temporary agreement on employment and communities. In particular, we are
concerned that a deal may benefit some provinces and some producers to
the detriment of others.”
The IWA, along with other
forest unions in both countries, has expressed its concerns that the
“cure could be worse than the disease” for workers in both the US and Canada. The union has been studying
joint strategies with forest workers organizations in the US as away to come up with a
mutually acceptable agreement.
But other observers are
hoping the ruling will encourage forces on both sides of the boarder to
come up with a workable deal in a speedy fashion.
"Our sense is that you are
looking at a pretty meaningful probability you're going to see a
negotiated deal within 30 to 45 days," says CIBC World Markets analyst
Don Roberts, claiming the panel’s decision, rightly or wrongly, more
clearly sets the parameters for negotiator’s expectations.
The NAFTA panel’s ruling has
again raised sharp criticism from public interest and citizen’s groups
in Canada over the secretive and
exclusive adjudication and decision-making process and structures of the
agreement and the WTO regime.
Ellen Gould, veteran trade and investment
researcher and consultant, active with the Council of Canadians, says
the panels of the North American Free Trade Agreement and the WTO panels
are made up of life-time appointed trade and fiscal bureaucrats and
corporate executives who make rulings in secret and are not subject to
public scrutiny or the judicial system.
She adds this proves that these trade and
investment regimes are a failure in negotiating trade disputes in a
mutually beneficial way.
“The signing of these agreements has not
lessened the number of trade disputes between Canada and the US,” said. “They haven’t
stopped the US government from taking
unilateral action against Canada, like with the Softwood
Lumber Tariff, which has really hurt our economy.”