IF YOU think the Canada-United States softwood lumber dispute is about softwood lumber, you need to revise your thinking. Immediately. And thoroughly.
This is really a United States attack on Canadian sovereignty – Canada’s right to make its own laws, consistent with Canada’s national interests.
Here’s how it happens.
1. The Americans invent a trade “subsidy” where no subsidy exists. In the case of softwood lumber, Canada and the U.S. tax the resource differently. The Americans claim that difference constitutes a subsidy by Canada; we disagree.
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2. The U.S. imposes duties on Canadian exports to the U.S., to offset the “damage” caused by the “subsidy” they invented.
3. When the illegitimate duties cause serious problems for Canadian interests, the Americans offer a solution: “Just change your laws so they match ours, and the problem will go away.”
U.S. commerce undersecretary Grant Aldonas suggested that in January. It never dawned upon him that the U.S. should change its timber laws.
4. When Canada continues to disagree, the Americans raise the duties in an attempt to stop all the Canadian sector’s exports to the U.S.
Higher rates create a huge problem. The Canadian industry, dependent on exports, may not be able to last long without them, There is a real possibility that American actions will bankrupt virtually a whole sector of Canada’s economy.
The U.S. government has taken those four steps in the softwood lumber dispute. Bills have been prepared for introduction to the U.S. Senate and House of Representatives; they will raise the American duties to 45 percent of the value of the Canadian softwood entering the U.S.
This process poses a threat to all Canadians, including grain producers. The invention of the Canadian Wheat Board’s “dumping” of Canadian grain into the U.S. follows the same process. Duties on spring wheat and durum entering the States, originally set at four percent, are now 10 and 12 percent respectively. This is the first time in 10 tries that the U.S. has found something it can attack. And the U.S. has given no explanation for its action.
At the same time, the U.S. is stepping up its attempts to kill the Canadian Wheat Board – America’s No. 1 target – through the World Trade Organization.
An American success in these two attacks on the wheat board would devastate western Canadian farmers. They would lose their ability to export grain to the U.S., and be left at the mercy of multinational grain companies that would set grain prices for Canada’s producers.
Farmers, then, face the same problem as softwood lumber exporters.
It might be wise for both groups to discuss a common strategy to deal with these American attacks. They are contrary to the spirit, and probably the wording, of the Canada-U.S. trading deals, and challenge our ability to rule ourselves.
More important, if one party to a trade agreement moves outside the law to create advantages that it cannot obtain under the law, how can trade accords be meaningful? If one party refuses to respect the other party, how can significant dialogue happen between them?
How do such actions establish a “moral economy,” internationally?
Rob Brown is a United Church minister now engaged in graduate studies on ethics. The opinions expressed in this column are not necessarily those of The Western Producer.
