Trading with the 'schoolyard bully'
The Globe and Mail: He notes that the Americans insist they are not in violation, although all of those interviewed found the reasoning of Rob Portman, the U.S. trade representative, ludicrous and incomprehensible.

Language this strong usually comes from opponents of the FTA, NAFTA and the globalization movement. That the very architects of free trade between Canada and the United States should be speaking in such terms is, frankly, shocking.

Even more shocking is that, to a man and woman, they believe Canada should impose retaliatory tariffs, or other restrictive measures, unless the Americans are prepared to negotiate a new softwood lumber agreement that accommodates Canadian, and not just U.S., concerns, even though such a move could lead to a trade war between the two countries.

"I would sit them down and I would say to them, 'All right. Enough of this. You are out of line, and you know that you are out of line,' " says Mr. Reisman, who was chief negotiator of the original free trade pact.

"Set a deadline. And if they cannot meet that deadline, and if they persist in this, then there might be no choice but to act in retaliation."

"We should certainly load the gun on retaliation, in my view," Mr. Burney agrees. "We should take a look at California wine, we should take a look at Florida orange juice. We've got to get their attention down there."

There is a palpable sense of personal injury in their comments, which may come from the political irony that lies behind the American rebuke.

In 1987, the free-trade negotiations between Canada and the United States almost collapsed because the Americans refused to accept a binding dispute resolution mechanism, while Canada insisted on one. At almost literally the last possible moment, the Americans accepted the Canadian demand, on the condition that an Extraordinary Challenge Committee, as they called it, be able to review the decisions of all lower panels.

Although the Canadian negotiating team was very reluctant to accept yet another layer of appeal for trade disputes, they finally acquiesced.

It was to that Extraordinary Challenge Committee that the Americans appealed last year, when all other rulings on softwood imports went against them. It was that same committee that ruled last week in Canada's favour. That the Americans would repudiate the verdict of the very tribunal that they insisted must be part of the FTA infuriates those who negotiated the pact. It leaves Mr. Burney "mad as hell."

At this point, there are no good options. Canada has appealed to the World Trade Organization, which will almost certainly rule in Canada's favour, allowing this country to impose counter-measures to collect the $5-billion in tariffs that the Americans have illegally confiscated.
- posted by Sophont @ Wednesday, August 24, 2005