Will the Canadian government show a backbone?

Liberals pull plug on softwood negotiations

The Liberal government, under pressure from opposition critics and its own MPs to get tough with the Americans on softwood lumber, announced Tuesday it is cancelling next week's scheduled negotiations on the issue with the US government. The federal government is also once again talking about imposing duties worth up to $5 billion on US imports such as California wine, though Canada doesn't expect to be in a legal position to do so until mid-2006. The federal government is not, according to one official, considering whether to threaten American access to Canadian energy, a move strongly opposed by Alberta Premier Ralph Klein, but advocated by BC Premier Gordon Campbell and federal industry minister David Emerson. International trade minister Jim Peterson said Tuesday's decision to pull the plug on negotiations, made in consultation with provincial governments and industry, follows the US refusal last week to comply with a ruling by a committee established under the North American Free Trade Agreement rules. "We fully support the federal government's decision to suspend these discussions and look forward to continuing to work with the federal government and the provinces to bring a resolution to this long-standing disruption of free trade," BC forests minister Rich Coleman said in a statement. Peterson portrayed last week's NAFTA decision as a slam-dunk win for Canada and demanded the return of $5 billion in duties paid by Canadian companies since 2002. But the US government, citing legal technicalities, stated that under American trade law it is not obliged to honour the NAFTA ruling. "The government of Canada will continue to consult with industry stakeholders as we consider all possible options for promoting Canada's interests in this long-standing dispute," Peterson said in a news release.

In Vancouver, foreign affairs minister Pierre Pettigrew said Tuesday that trade sanctions are to be brought before cabinet by finance minister Ralph Goodale. He said Canada has to be "determined and strong" in the light of the American decision to ignore last week's NAFTA ruling. "For five years we've been fighting this present challenge and conflict. Canadians have suffered a lot because of the illegal actions of the United States. Many, many of our workers and their families have been victims of these illegal action of the United States". There would be no point, he said, in undertaking negotiations now as long as the Americans are defying last week's NAFTA ruling. John Allan, president of the BC Lumber Trade Council, said the Canadian industry supports the decision to cancel talks. He said it's time to pause to see what action Ottawa intends to take. The US government said Tuesday it is dismayed by Canada's latest move but didn't budge from its position on the NAFTA decision. "We are disappointed the meeting has been cancelled and hope talks can resume shortly," said Neena Moorjani, a spokeswoman for US Trade Representative Rob Portman. "As Ambassador Portman has made clear, the United States respects the NAFTA process. US policy continues to be that we comply with our trade obligations." John Ragosta, lawyer with the US Coalition for Fair Lumber Imports, suggested that Canada's trade war threats may not amount to anything more than political posturing. "No, I'm not sitting around quaking in my boots," Ragosta said.
(National Post, Vancouver Sun. Globe and Mail 050817)