Pay Up, Deadbeats!

[Flubber]

Originally posted by Wezil
So long as we do nothing in response what incentive have they to change?

This approach works well for the US.

They have little to no incentive to change as it stands. Thats why some sort of response is needed. But I still think that Canada gets hurt if trade relations go to crap entirely. Perhaps a levy on all natural gas flowing into the US to recover enough money to get what we are owed.

Such a levy would probably break all sorts of trade rules but if the rules don't matter to the US, why should Canada play by them??

[Wezil]

Yes I agree, a trade war would be bad all round, but we can't abide the status quo.

As to the rules, again I agree. The rules should apply to both sides but when you go year after year and ruling after ruling and make almost no progress it is time to admit we are not playing by the same rules.

I do like your levy idea (although it is mixing issues - gas vs lumber) but I think we can be more creative than that. How about biting the bullet for 6 - 12 months and sending NO LUMBER of any kind....?

[Flubber]

Originally posted by Wezil


I do like your levy idea (although it is mixing issues - gas vs lumber)

I just was thinking we show that we can cause them problems with respect to stuff they really really need. If we wanted to get real mean, we could stop natural gas from flowing for a day or two in mid-january

Originally posted by Wezil


but I think we can be more creative than that. How about biting the bullet for 6 - 12 months and sending NO LUMBER of any kind....?

I am afraid that what will happen is US customers will start to find alternatives and we will only end up hurting the lumber industry further.

Trade action often has unintended consequences. The beef squabble really hurt US packing industries and I understand that now there is a larger Canadian packing industry

[Ben Kenobi]

You think most Canadians are willing to pay the price in pain to get their attention? That's the thing I have my doubts about.

I sure am, and that's the mood around here in one of the largest lumber producing areas in all of Canada. We are sick and tired of these tariffs, and want them to come off, so that we can all make money, Canadians and Americans.

As for unintended consequences, the Canadian mills are so efficient that they were still able to make money despite the tariff, and the high Canadian dollar hurting our exports. How do you think the American mills are going to compete once the tariff gets dropped?

[Flubber]

Originally posted by Ben Kenobi
As for unintended consequences, the Canadian mills are so efficient that they were still able to make money despite the tariff, and the high Canadian dollar hurting our exports. How do you think the American mills are going to compete once the tariff gets dropped?

NOT well although my understanding was the US mills were in pretty good shape and have been raking in windfall profits as their prices rose to match the tariff added canadian one.

My comment on unintended consequences addressed WEzil's idea that we ship the US NO LUMBER . . .. OK --largely idling the industry for a while in Canada and creating a shoprtage in the US-- it could work out, but I'm afraid the US would find other sources or this would spur use of alternative materials

[Wezil]

But what alternative sources/materiels could they possible come up with that would be anywhere near as cheap (or good) as Cdn wood? Shipping trees from asia? How much will that cost?

The cost of new housing/furniture/newsprint etc would skyrocket if the Cdn source was stopped.

[Theben]

Repaying tariffs= $5, 000, 000, 000

Trade war between U.S. & Canada= $100, 000, 000, 000 +/-

The possibility of said war killing NAFTA= PRICELESS

[Odin]

TRADE WAR!
TRADE WAR!
TRADE WAR!

[GhengisFarbâ„¢]

Go, Canada!

[chequita guevara]

GhengisFarb sighting!

[GhengisFarbâ„¢]

How ya been, Chez-Its?

/me waves at chegitz guevara.

[chequita guevara]

Gotta cold.

Still waitin' on those graphics, palleo.

[notyoueither]

We're so angry we, we... we won't talk to you!

Take that!

http://www.canada.com/news/national/story.html?id=fcc390aa-2c80-4249-b8fa-0f92e06e0a9a

Angry Canada suspends softwood talks with U.S., cancels Monday meeting

Steve Mertl
Canadian Press

Tuesday, August 16, 2005

VANCOUVER (CP) - The spectre of a wider trade war with the United States grew Tuesday after the federal government suspended negotiations to settle the softwood lumber dispute because of a U.S. refusal to abide by a NAFTA ruling that sided with Canada.

The two sides were expected to meet in Ottawa on Monday but Trade Minister Jim Peterson said he put those talks on hold after consulting with lumber-producing provinces and the forest industry.

An industry source said the push is on to get Prime Minister Paul Martin to speak directly with President George W. Bush before the dispute damages the two countries' trading relationship, the biggest in the world and largely hassle-free.

Peterson said in a statement he informed U.S. Trade Representative Rob Portman, his American counterpart, of the decision.

"I have conveyed Canada's position to Mr. Portman . . . and appreciate our open dialogue," said Peterson.

Portman's spokeswoman, Neena Moorjani, said the U.S. government was disappointed and hoped talks would resume shortly.

"As Ambassador Portman has noted, we continue to believe it is in the interest of the United States and Canada to reach a permanent, market-based negotiated solution and had been preparing for these talks with this goal very much in mind," Moorjani said from Washington.

In a prepared statement, she reiterated the U.S. view it is not flouting its NAFTA obligations. U.S. trade officials argue a move last fall to comply with a World Trade Organization ruling on softwood duties rendered last week's ruling by a NAFTA extraordinary challenge committee moot.

The Canadians claim the Americans are hiding behind a legal technicality to avoid cancelling punitive tariffs on Canadian lumber and returning more than $5 billion in duties collected since May 2002, with interest.

B.C. Forests Minister Rich Coleman, whose province accounts for more than half of lumber exports to the United States, said scraping the duties and returning the money would renew confidence in a negotiated settlement.

"Until we see some good-faith measure from the United States there's not really much point in our people going to the table to see if there's a possibility of a deal," he said.

The U.S. decision represents a fundamental breach of faith, said Gordon Ritchie, who helped negotiate the 1988 Canada-U.S. Free Trade Agreement, whose dispute-resolution mechanism carried over into NAFTA.

"I certainly support suspending the discussions," Ritchie, brought in to help with the lumber talks, said from Ottawa.

"There's no way that I can sit across the table from somebody whose main bargaining leverage is that he isn't complying with the existing agreement. That has to be cleared up first."

The extraordinary challenge committee is NAFTA's court of last resort. The U.S. had demanded it review NAFTA appeal decisions that found Canadian softwood imports posed no threat of injury to American producers.

The panel - two Canadians and an American - last week unanimously upheld the earlier rulings, which under the treaty carry the force of law.

"We're not talking about some trivial violation," said Ritchie.

"If they don't obey the ECC they're in violation of their own law," said Carl Grenier of the Montreal-based Free Trade Lumber Council. "Perhaps that's not really dawned on them yet."

Barring an American climb-down, Canada will have to decide what its next step will be, said John Allan, president of the B.C. Lumber Trade Council.

"There's been reference to retaliation; I see linkage (with other trade issues) is coming back onto the table," he said, referring to NDP Leader Jack Layton's suggestion Monday that Canada slap an export tax on oil and gas shipments.

"I think the federal government's going to have to take time to think through what they can do and what they should do."

Under NAFTA, Ottawa can apply for retaliatory duties on a range of U.S. imports and last year set the wheels in motion to retaliate under WTO rules potentially against billions of dollars in U.S. goods.

But a spokesman for the American lumber industry claimed the Canadians used U.S. response to the NAFTA ruling as a pretext to pull out of the talks.

"I don't think the Canadian provinces and the industry within those provinces are able to come to a consensus on how to deal with the issue," Barry Cullen, executive-director of the Coalition for Fair Lumber Imports, said from Washington. "I think that's the fundamental problem."

Cullen said the Americans were expecting the Canadians to table a response to a U.S. proposal for a temporary export tax to replace lumber duties while the provinces implement open-market reforms to their forest policies.

The Americans were also looking for a limits on exports of lumber from dead stands of pine beetle-infested timber in the B.C. Interior, which must be logged before it rots. Quotas are a non-starter with the Canadians.

Canada exports about $10 billion a year in spruce, pine and fir lumber a year to the U.S. home-construction and renovation sectors, comprising about a third of the American market.

U.S. producers have claimed for decades Canadian exports are subsidized by low Crown timber-cutting fees and other policies, launching four trade actions since the early 1980s.

A five-year quota deal created an uneasy truce in the late 1990s, which evaporated when the agreement expired in 2001.

The United States collects about $100 million a month in lumber duties, money it claims it does not have to return even if Canada ultimately wins its trade challenges.

Incentive to reach a settlement diminished in the last couple of years as a red-hot U.S. housing market drove up lumber prices.

A downturn would increase pressure on both sides to cut a deal, more so on the American industry whose mills are far less productive at low lumber prices than their Canadian counterparts.

The U.S. lumber coalition argues provincial forest policies help give the Canadian industry that edge.

© The Canadian Press 2005

[KrazyHorse]

http://www.cbc.ca/story/canada/national/2005/08/23/softwood_retaliation_2005_08_23.html

Canada may retaliate with tariffs in softwood battle
Last Updated Tue, 23 Aug 2005 13:48:43 EDT
CBC News

Canada may fight back against U.S. tariffs in softwood lumber battle. Liberal cabinet ministers say their colleague Trade Minister Jim Peterson is examining sectors where Canada could impose its own tariffs and place maximum pressure on the U.S.

Since May 2002, U.S. Customs has collected $5 billion in duties. That's when American trade officials concluded softwood imports were being unfairly subsidized by the Canadian government.

* FROM THE CBC ARCHIVES: At Loggerheads: The Canada-U.S. Softwood Lumber Dispute

There have been numerous appeals to international tribunals including NAFTA and WTO. Canada has claimed victory but the United States has shown no inclination to lift the duties and return the money.

David Wilkins, the new U.S. ambassador to Canada, has suggested the two countries return to negotiations.

Negotiations were supposed to resume in Ottawa on Monday. But Canada's International Trade Minister Jim Peterson postponed the talks indefinitely.

He said that Prime Minister Paul Martin will soon speak to U.S. President George W. Bush about the softwood lumber conflict.

[DanS]

Why doesn't Canada just go the market-based fee approach, like the US has suggested? It would take away a crutch from Portman on this issue.