Che Guava
The Juicy Revolutionary
:blink: Is it really over..?
link
So, now for the question: did we do good to end the battle, or did Canada get the short end of the stick? Economists, I'm looking at you....
P.M. wins softwood truce
By STEVEN CHASE AND BARRIE MCKENNA
Friday, April 28, 2006 Page A1
OTTAWA: WASHINGTON -- Prime Minister Stephen Harper has delivered what two Liberal predecessors could not: a truce in the five-year softwood lumber dispute with the United States that will buy peace for nearly a decade.
Canada and the United States agreed yesterday to a seven-year deal -- with the option of renewing for two more -- that ends one of this nation's costliest trade wars and returns $4-billion (U.S.) in U.S.-collected duties to Canadian firms.
"Canada's bargaining position was strong, our conditions were clear and this agreement delivers," Mr. Harper told Parliament yesterday as he announced the deal.
"Canada asked for stable and predictable access to the U.S. market. The United States has agreed to provide Canadian producers with unrestricted access under current market conditions," he said.
"This is what Canada wanted. This is what Canada got."
The settlement came at a cost, however. The Conservative government is allowing the United States to keep about $1-billion of the duties it levied on Canadian firms even though Ottawa won major legal battles under the North American free-trade agreement that should have voided the dispute and refunded all levies.
Opposition Liberal Leader Bill Graham criticized the deal for letting the Americans keep $1-billion. "It's a great day for American industry and American trade policy," Mr. Graham said. "Unfortunately, it's a disaster for Canada, for free trade and for the Canadian lumber industry."
He said the deal will fuel more trade harassment of Canada because about half of the $1-billion the United States gets to keep goes to the timber coalition that triggered the complaint.
"They will use Canadian money to continue their fight to impose unfair restrictions on Canada's lumber industry."
U.S. President George W. Bush praised Mr. Harper's "leadership in resolving this issue" and said the fact that a framework deal was reached reflects close relations between Ottawa and Washington.
"This agreement shows how NAFTA partners can overcome differences and work together. The United States' close ties with our good friend and northern neighbour made this agreement possible," Mr. Bush said in a statement.
A refund of the duties will help lumber companies and their tens of thousands of employees. Vancouver-based Canfor Inc., Canada's largest lumber producer, would pocket nearly $895-million before taxes.
Under the complex arrangement, Canada can ship as much lumber as it wants to the United States. But if the price falls below $355 per thousand board feet (the current price is about $370), the different regions of Canada have to make a choice. They can pay a sliding export tax that rises as high as 15 per cent as lumber prices fall, or pay a smaller charge and face a regional quota. Canada would collect the export tax.
Washington, meanwhile, has agreed to lift its duties on Canadian lumber, now set at about 10 per cent. They will remain until the deal is finalized, at which point companies would get their money fully refunded.
Also, yesterday the United States formally filed a challenge to a recent NAFTA ruling that ordered it to cut the major portion of the duties to zero -- just to "preserve our legal rights," U.S. Trade Representative Rob Portman said.
The deal earned applause in softwood-producing provinces as British Columbia and Ontario warmed to a revision of the proposal they had balked at yesterday.
B.C. Premier Gordon Campbell, whose province is responsible for about half of the softwood lumber exports to the United States, called the deal a compromise that ends uncertainty.
"A lot of industry said to us, 'Take it, let's move on,' " he said. "We can wait another five years for litigation. We can negotiate for another five years . . . You never get everything you want."
Ontario Natural Resources Minister David Ramsay said his province was happy after the Tory government increased Ontario's share of the market.
"We got what we wanted," Mr. Ramsay said in an interview. "We're back to our historical trading volume, which is 10.3 per cent of the Canadian exports into the U.S."
Much of the conflict-weary timber industry also saluted the deal. "For a lot of companies in British Columbia, this doesn't give them everything they wanted, but speaking for us, it gives us a good base to work from," said Jim Shepherd, chief executive officer of Canfor Corp.
The agreement is well short of what Mr. Harper and Liberal prime ministers Jean Chrétien and Paul Martin have long promised -- free trade in lumber and a 100-per-cent refund.
By agreeing for the third time in two decades to limit its exports, Canada may be implicitly acknowledging U.S. allegations that Canada's lumber is heavily subsidized. Canada and the United States signed similar deals in 1986 and 1996, but both failed to stick.
NDP Leader Jack Layton condemned the deal as a betrayal of Canadian interests that permanently compromises Canadian industry.
"Stephen Harper has completely undermined the credibility of the NAFTA dispute settlement process and has capitulated to the U.S. lobbies and George Bush," he said. "This deal does nothing for those forestry workers and their families who have lost their livelihoods because the United States refuses to play by their own rules."
However, an architect of the Canada-U.S. free-trade agreement said Ottawa was right to accept the deal.
Gordon Ritchie said it's acceptable given that the only option was more legal battles with a well-funded U.S. timber lobby that has big support in the U.S. Senate.
"It represents an entirely reasonable alternative to continuing, costly and uncertain litigation," Mr. Ritchie said in an interview. "It's a bit of a hold-your-nose deal, but that said, I am a realist and I know the kind of obscene political strength the U.S industry possesses."
Canadian and U.S. officials acknowledged that it could take up to three months to finalize the agreement. Among the major issues to be worked out: all parties must abandon all ongoing lawsuits, including a U.S. industry challenge of NAFTA's dispute-settlement regime. As well, Canadian companies must give up their claim to the roughly $1-billion that goes to the United States.
The deal removes the biggest irritant in Canada-U.S. relations and helps Mr. Harper fulfill his pledge to build closer ties with Washington. It delivers for the Tories' political base in British Columbia -- Canada's biggest softwood-exporting province -- and protects jobs in Quebec, where the party hopes to make gains in the next election. Finally, it keeps Atlantic Canadian producers out of the dispute by exempting them from the export tax.
The complicated truce was clinched late yesterday afternoon after much arm-twisting and cajoling by Mr. Harper and International Trade Minister David Emerson, who worked the phones for more than a day to overcome objections from Ontario and British Columbia and persuade the Americans to sweeten the agreement.
The United States gave ground by lowering the lumber price level at which the export tax is lifted and trade is duty free. The Tories also assuaged Ontario's concerns by changing the way Canada's market share will be divided among provinces.
Mr. Emerson had warned the industry that if the deal failed, the Harper government wouldn't make another attempt.
Mr. Emerson acknowledged that Canada didn't get everything it wanted. But he said the deal is significantly better than what the Liberals had tried to cobble together before the election and is in "Canada's fundamental economic interests."
The tentative deal has the backing of the U.S. lumber industry. In a statement, the Washington-based Coalition for Fair Lumber Exports said that while it has "concerns" about some elements, its members "could support settlement terms that U.S. officials have described."
One U.S. industry official called the deal "minimally adequate."
The source added that the deal is the best Canada can expect if it wants any of the duties returned and to avoid another round of U.S. duties.
Steve Swanson, chairman of the Washington-based Coalition for Fair Lumber Imports, which triggered the trade dispute in 2001, called the agreement "fair and balanced."
"All we have ever asked is that Canadian timber and logs be sold in open and competitive markets," he said.
link
So, now for the question: did we do good to end the battle, or did Canada get the short end of the stick? Economists, I'm looking at you....
