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I’m in a sharing mood. - kwc How Bush muddied
relations with Canada
WASHINGTON – In his occasional internationalist moments,
President Bush likes to tell the story of how on his first image-repairing
journey to the scarred Gulf Coast last month the first people he encountered
were Canadians on the scene to help.
It is a disingenuous tale from a president who talks open markets and
cordial hemispheric relations but practices consumer-unfriendly protectionism
with interest group-dictated regularity. Take lumber. On top of a still-prosperous new housing
market, the hurricane season has triggered a gigantic surge in demand. In
addition to aid workers, Bush might also have seen tons of Canadian softwood
piled up and ready to help shelter hundreds of thousands of people who have
lost everything. The reason he didn't see much is that for the better part of
four years the United States has been slapping tariffs averaging nearly 30
percent on Canadian softwood lumber. One result is that prices for consumers
are unnaturally higher, in this case the prices of homes. Another
result is that international trading relationships are disrupted, often in ways
that affect broader relationships as well. People in this country don't pay
enough attention, but there is no relationship in the world more important than
the one with Canada. Right now it is a needless mess. On numerous occasions, the United States has failed to make
a definitive case before international bodies that its protectionist lumber
policies conform to the complex array of treaties that bind countries together.
Most important, it has consistently failed to make a case to the dispute
resolution mechanisms created under the North American Free Trade Agreement. Under the latest rejection of the US position by a NAFTA
panel -- one that included a majority of American members -- the Bush
administration was given a deadline of next week to begin complying. However,
Bush may seek the delay and appeal routes. This dispute is a huge deal in Canada. To understand why,
consider a trade mission that Canada's natural resources minister, John
McCallum, undertook to China this week. According to reports from Beijing, his enthusiasm for
pitching the country's oil and gas resources to China has increased in direct
proportion to the seriousness of the lumber dispute with the United States. McCallum's comments suggest that Canada, thinking big and
long-term, is less interested in tit-for-tat retaliation games with this
country and more interested in thinking anew about its larger interests. They
could and no doubt should include NAFTA, but if silly American unilateralism is
going to undermine it, then Canada has other options in the world. Bush and Canada's Prime Minister Paul Martin are supposed to
get on well personally, but the two apparently had a testy telephone call last
Friday, during which Martin rejected Bush's entreaty to negotiate on an issue
the American side has already lost. Instead, Canada is very likely to end up in
US courts seeking to get the Bush administration to follow the law it is sworn
to uphold. It would be one thing if Canada were found to be flagrantly
dumping cheap products on the US market. The key element in the dispute,
however, focuses on a claim by domestic lumber interests that Canadian
provinces do not charge a high enough fee for tree-cutting (called stumpage)
and that the result is a government subsidy. This isn't a genuine grievance,
especially given the fact that that the Bush administration has looked the
other way in the face of much larger challenges, like Chinese intellectual
piracy, textile products dumping, and currency value manipulation. The situation is made even more absurd by another flagrant
abuse of international norms called the Byrd Amendment -- after Robert Byrd of
West Virginia. This enables the very industries that go whining to Washington
to get the extra tariff money that is collected. We're talking about billions
of dollars here. One reason Bush's trade policy record is so spotty (I'm
being charitable) is that his actions so often contradict his words. Running
for election in 2000, one of the ways he carried West Virginia was to promise
protection for the fragile steel industry, a pledge that didn't accomplish much
beyond higher US prices before the protection was ended. Bush was wrong then, and he's wrong on lumber now. At a
minimum, citizens should expect their government to fight for their best
interests when they are threatened from abroad. In this case, there is no
threat, and corporations are benefiting at the expense of consumers. |
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