Well, thank GOD that we have the WTO, NAFTA and the like. What would politicians and lawyers do with all their free time if they didn't have these trade issues to squabble over?

Canada suffers setback in new softwood ruling

The World Trade Organization has ruled that the US complied with international law when it imposed billions of dollars of duties on Canadian lumber - a decision that the US calls vindication and Canada says is a setback. The WTO panel ruled yesterday that the US adhered to international law when it issued a revised finding in late 2004 that Canadian softwood lumber imports threatened its mills, said a US trade official, speaking on the condition of anonymity. The confidential ruling, confirmed by Canadian officials, further complicates an already tangled web of legal decisions in the long-running trade feud. Canada has trumpeted a seemingly contradictory North American free trade panel ruling earlier this month as the end of the dispute. That panel found the US duties, which now total more than $4-billion, illegal under US law, prompting Ottawa to call for their immediate removal. At a meeting of New England governors and Eastern Canadian premiers yesterday, Frank McKenna, Canada's ambassador to the US, pointed out that one NAFTA panel after another has ruled in Canada's favour. “You can't have it both ways,” he said during a news conference.

In Washington, the US trade official said the WTO panel's “findings confirm that the . . . duties on Canadian lumber were justified to counter the threat of material injury to the US industry.” The official added that the WTO ruling provides “an independent basis” for keeping in place the duties, which are costing Canadian lumber companies US$100-million a month. Toronto trade lawyer Lawrence Herman said the WTO and NAFTA rulings aren't so much contradictory as “mutually exclusive.” NAFTA panels determine whether a country is complying with its own laws, while WTO panels check adherence to international trade laws, he said. In recent days, several members of Prime Minister Paul Martin's cabinet and opposition politicians have called on Ottawa to hit the US with retaliatory duties, sparking an increasingly heated cross-border war of words. Even before yesterday's ruling, the Bush administration has refused to budge, urging instead that the two sides negotiate a compromise.

Yesterday's WTO ruling is an interim decision. A final ruling, which seldom varies from the original, will be made public in October. Both sides can appeal. “We're disappointed with this interim report, which is a setback in an ongoing stream of litigation,” said Jacqueline Larocque, a spokeswoman for international trade minister Jim Peterson. But Canadian officials were quick to play down the significance of the WTO decision, noting it is only an interim ruling and that lawyers are already preparing to appeal. Meanwhile, Ottawa is rekindling two further legal challenges. The Canadians want the US Court of International Trade to order the US government to lift the duties and refund everything it has collected so far. Ottawa is also seeking a ruling from the court that the so-called Byrd amendment does not apply to Canada and Mexico, the US's partners in NAFTA. Under the Byrd law, all anti-dumping and countervailing duties must be paid to affected US companies, rather than the US Treasury.

Columnist Diane Francis writes that the Liberals have completely mishandled the softwood lumber file, and now there are only a couple of things Ottawa can do. Prime Minister Paul Martin should personally meet President Bush to convey to him how unjust this all is and how Canada has been put in a box because it cannot negotiate a deal with a Commerce Department that has shown it will ignore agreements and court rulings. The Prime Minister should also emphasize to the President that both countries are very dependent upon one another, that Canada wants to do its best to continue to trade in energy and other goods and services with the Americans and that Canada will be happy to expedite the construction of an Alaska pipeline. Then the Prime Minister should give the President time to correct the situation. If nothing is done, then the government must alter policy direction somewhat in the face of blatant American protectionism. This would include emphasis by Ottawa and the provinces on assisting and expediting forestry and other resource exports outside the US where it makes economic sense. Then a priority must be put on building an oil pipeline from Alberta's oilsands to BC's coast for export to China, India and other countries. That will reduce dependency upon the US market for those massive oil exports in future in order to keep the Americans honest. The American trade bureaucracy is behaving like a forestry monopoly buyer that has destroyed the market and given Canada no other choice but to pre-emptively protect itself.
(Globe and Mail, Vancouver Sun, National Post 050830)

First the decision goes to Canada, then the U.S., then Canada, then the U.S. depending on which body is appealed to. WTF? Who's got final say on this crap?