Credit where due, criticism where required
Overnight reaction to the softwood trade agreement between the U.S. and Canada appears mixed. Kudos to Mr. Emerson and the government for finally pushing a deal forward.
Lets hope thanks can still be given in the years to come. Aside from the expected partisan, inter-provincial, and intra-industry bickering over whether the deal is a good one or not, the actual merit of this agreement will be measured in terms of how it stands up to the test of time.
Trade observers will also be keeping a close eye on how this deal affects other trade irritants between Canada and the US. Clearly the NAFTA trade dispute mechanism didn’t work – never worked – with respect to softwood lumber, and Canada’s capitulation sends a message to foreign markets: powerful groups will get their way despite any agreed upon framework of rules.
“The deal is awful, just awful. It basically marginalizes the Canadian industry over the next seven years,” Richard Kelertas, an analyst at Desjardins Securities, said in an interview.
“Even if the Americans make some modifications to this, it is still a trap for the Canadians. The trap is that there is no language to exit, so they will be trapped in this bad deal for seven years.”
Another deal may send the message to Canadian companies that NAFTA‘s dispute resolution system is worthless. Last summer, a NAFTA panel handed Canada a decisive legal win. But the United States vigorously disputes Ottawa’s interpretation of the decision, and the fight has continued.
Some Canadian industry leaders complained that Ottawa is selling out its fundamental free-trade values to ease relations with the United States.
“This architecture will not give us lasting trade peace,” said Carl Grenier, executive-director of the Montreal-based Free Trade Lumber Council. “It’s permanent managed trade.”
Mr. Kelertas blasted Mr. Harper for agreeing to a deal that is bad for Canada “just to get a nice photo-op” with U.S. President George W. Bush.
“We are talking about the lifeblood of thousands of communities across Canada,” he lamented.
If an agreement similar to the one on the table does go through, he added, shareholders of Canadian forestry and paper companies could sue the Canadian federal government for financially crippling them.
“As far as I am concerned, this deal is absolutely something that should never happen and under NAFTA and WTO cross-border deals are illegal,” Mr. Kelertas said. “The danger here is that you set a very dangerous precedent by saying that NAFTA is no good and can be argued by the Americans that it is unconstitutional.” More >
We’ll never know what kind of deal Emerson would have helped finalize had the 2006 election come to a different conclusion. Maybe this deal is as good as it gets, and maybe that’s as good as Emerson has to give. Yet this deal does smack of capitulation and expediency or opportunism, and that runs counter to what David Emerson said back in October 2005. Flip flop?
What we do know for certain is Vancouver—Kingsway, where there are no 30 story office towers and not a single lumber mill in sight, doesn’t have an MP with a legitimate mandate from the people. Emerson clear-cut this riding and left nothing but scorched earth. While Emerson might be able to represent the needs of CEO‘s bunkered in glass and concrete towers downtown, by his own actions he’s made it impossible to work effectively on behalf of his own constituents.
Some will argue that’s a price my riding has to pay. Most of the more than one hundred thousand people who live in our riding say that price is too high.