The Softwood Lumber Dispute:
Who Do We Really Blame?
World/Terry Pearson
November 26, 2005 - So far all we have been hearing from the Canadian media is about Canada's side of the issue along with Paul Martin's so-called hard line stand. We hear nothing at all about the American side of the debate.
Last week that at the APEC conference, it was reported that Canada's Prime Minister Paul Martin "lectured" President Bush in private on the issue. (Imagine if you will, a sparrow squawking at an eagle). Then he publicly denounced the U.S. on softwood, not only at the APEC conference, but at the summit of the Americas as well.
In any event President Bush choose to ignore him, knowing all too well that Paul Martin is under notice that he (Martin) no longer has the moral authority to govern Canada.
A short time ago Paul Martin told Canadians that he was going to get tough with the US on softwood. He threatened to divert the sale of Canada's oil and softwood from the US to other countries.
First of all he would have to fight with Alberta's Premier Ralph Klein for the oil, and secondly the liberals have had 12 whole years to find global markets on softwood. But instead, it seems they choose to fight the Americans on the issue.
Paul Martin is in a situation is that he is leading a liberal minority government and there is a possible chance he may be dumped in the new year. So it's not hard to conclude that he is posturing himself over the issue of softwood in order to get himself re-elected. He is obviously appealing to anti-American sentiment in order to keep his job. He could care less about the Canadian lumber industry.
The softwood lumber dispute dates back hundreds of years. The CBC reports that even within Canada there are divisions. The B.C. Lumber Trade Council has argued a trade war with the Americans over softwood lumber would be costly and should be avoided by accommodating U.S. demands. The Free Trade Lumber Council, which includes lumber producers in Quebec and Ontario, wants to fight it out. What most Canadian foresters and governments do agree on is their goal of free trade in softwood lumber
Softwood lumber is easy-to-saw wood, such as spruce, cedar, pine, Douglas fir, and other coniferous trees, which is used for paper, fiberboard, framing, siding, fencing, and other applications. Canada is rich in softwood
The Canadian softwood industry employs 290,000 people. It's the main economy of of 300 Canadian towns. A third of softwood consumed in the U.S. is produced in Canada.
In March 200, the Canadian economy took a huge hit when the U.S. the levied tariffs on incoming Canadian lumber, and then two months later imposed an additional anti-dumping duty, charging that the Canadian lumber was being sold south of the border for less than it cost to produce.
The problem between the two countries is how the stumpage, fees are applied. Stumpage fees are the charge to harvest lumber. In the U.S. the timber is on private land and the rights are auctioned off to the highest bidder. Unlike the US, most of Canada's timber is on government land and stumpage fees are set by the Canadian government.
It's quite natural then that the U.S. would view this as a government subsidy. American producers allege that the Canadian government sets stumpage fees at an artificially low level, one-third to one-fourth the actual value, in order to keep Canadian lumber workers and sawmills busy. US producers claim this is a $4.4 billion (in Canadian dollars) annual subsidy of the industry. Therein lies the rub.
It's bad enough that the Bush administration has been under extreme pressure over the outsourcing of jobs to other countries so it's natural that they are going to do what they can in order to protect their own lumber industry.
As it stands, they are not about to wreak havoc within their borders for the benefit of Canada. Why should they? In an article to article to "The Weekly Standard," James Thayer writes that the US Coalition for Fair Lumber Imports, claims these Canadian subsidies have almost ruined the United States softwood industry.
So how do the Canadian liberals handle the issue? Here is an example. International Trade Minister Jim Peterson issued the following statement on Wednesday regarding the NAFTA countervailing duty panel’s rejection of a US Department of Commerce (DOC) request for clarification on the panel’s latest decision on softwood lumber.
“Canada has strongly opposed any initiatives to delay doing the right thing. We will keep up the pressure to see NAFTA respected. Here is a prime opportunity for the US to demonstrate its commitment to the treaty it signed, plain and simple."
It's quite clear that when the NAFTA agreement was worked out, more attention should have been given to the area of softwood, but according to Peterson, "the right thing" to do is to bash the US over the head with the NAFTA agreement and trade rulings by the courts. The socialist minded liberals hold their noses in the air, with the attitude that Canada won't negotiate away it's resources. How absurd can they be. Can you blame the Americans for their stalling tactics.
The liberals have no idea when it comes to doing business with the U.S. The Americans are capitalists. Unlike Canada, they base their economy on how well their private industry functions, not what the government can provide
It would seem then that the way to do business with the U.S. is to sit down at table with them and talk business. We let them know that we have softwood lumber for sale at a good price. It would benefit the American building industry.
Of course the way we set our stumpage fees has a negative affect the US lumber industry. So lets negotiate and strike a balance, and yes the lumber industry will be some what affected on both sides of the border, but over a period of time, and as the economy grows, the free market would correct the deficiencies of the lumber industries in both countries. It's a win win situation.
But this will never happen as long as the liberals are in power in Canada. Conservative leader Stephen Harper has concluded that the softwood standoff is due to the sour relationship between the Liberal party and Washington.
It's fashionable amongst liberal circles, in Canada to call the US President a moron, not to mention that his administration include a "bunch of ignorant bastards." To top it all off, Paul Martin sticks his nose in the air and walks away from the US missile defense negotiations. Since we don't really have an army here, Paul Martin wants the US to protect us but he's not willing to pay for it.
The Americans have shown their sincerity on this issue. On his visit to Canada, President Bush extended a friendly hand to Paul Martin. Just recently he U.S. House of Representatives has voted to repeal a controversial trade law that allows American companies to benefit directly from the duties Washington collects on imports from Canada and other countries.
Under the Byrd amendment of 2000, American lumber companies would stand to receive the $5 billion in duties that have been collected on Canadian softwood lumber imports into the US
So far, that money is still in the treasury of the US government while the long-running softwood dispute winds its way through Canada's liberal agenda..
As Mr. Harper puts it, we have to show the Americans that were are their friends and stand shoulder to shoulder with them. This way we can look them in the eye.
For example, can look them in the eye and tell them, of course we support your efforts on the war on terror in Iraq. We don't have the man power to spare but we will do what we can to help you out in Afghanistan.
Do you know what I think? I think the Americans are stalling the softwood issue until such time as Canada elects a Conservative government.
Terry Pearson has the Canadian Conservative Web Site called “The Right Point” |
