GLOBE AND MAIL
2006.10.17
GORDON GIBSON
GORDON GIBSON Eat a lot of crow, convince us we should walk away from a billion dollars, or face a dangerous election issue? These are the unattractive choices facing the Harper government after a huge lumber industry victory in the U.S. Court of International Trade (CIT) last Friday.
That court ruled we are entitled to the return of every penny of the $5.3-billion of illegally imposed duties on our softwood exports over the years, as well as free entry of our products. But in the recent "Softwood Sellout Agreement," Ottawa said it would forgo $1-billion of the total duties owed it and agreed to a new border charge as high as 22.5 per cent.
The vague public impression is that we had to do what amounts to a bad deal because the Yankee bully had us on the ropes and would simply keep changing the rules until we capitulated. That is what our government would like us to believe -- but it is not true.
The true story is one of duplicity on both sides of the border.
The Americans, naturally, were conspiring against our industry.
But in a weird twist, our government has been helping them. To understand this requires looking at two tracks.
There is the legal track, which our industry has been following for five years. As of this spring, we had won near-final victories under NAFTA and in the CIT. By last summer, the duties would have been gone with the money-return order soon to be achieved.
Alas, there is also the political track. Just after the Tories won the election, they had a chance to recruit Liberal David Emerson.
How to justify this? He was the softwood expert; we need him.
U.S. President George Bush soon picked up the phone and asked Prime Minister Stephen Harper if he wouldn't like to settle softwood, fast. He called us. After five years as president, he suddenly wants to settle? Mr. Bush had good reasons, of course. Our legal fight was going against him. We finally had the U.S. in one of their own courts -- and they were losing. In addition, a Montana senator's seat was hanging on softwood. So, let's see if we can't hornswoggle the Canucks.
No problem. The inexperienced Harper administration seized the chance to brag that in only a couple of months it had been able to fix an issue the Libs couldn't solve for five years. And it would validate Emerson's sleazy jump to the Tories. As a result, they bought a deal so loaded in favour of the Americans it was arguably worse than the one the Martin government had turned down earlier.
Export taxes were to be imposed even higher than the old tariffs, and this has now been done. We were to be capped at 30 per cent of the U.S. market when the Liberals had negotiated 34 per cent.
Sawmills are now closing in Eastern Canada, jobs lost in the thousands.
There will be lots more.
The U.S. protectionist lobby is to be handed $500-million of our money to pay their lawyers and refill their coffers to attack us again. We will pay for our own thrashing, in a fight we would have won had our government had the guts to stand up to the Americans.
Bad deal? Never mind. On April 27, Mr. Harper told an astonished House of Commons the issue had been settled. At that very hour, American lawyers were filing papers to restart the legal process.
The U.S. lied, and we said nothing. Without that betrayal, the very next day the final NAFTA decision would have kicked in and countervail duties would have ended at once.
Continuing the political track, industry holdouts remained -- so many that in desperation last week the two governments jointly appealed to the U.S. court to dissolve everything on the basis it had never happened. We stipulated the U.S. had never done anything illegal, destroying five years' worth of legal victories and our shield against future harassment. And yet, immediately thereafter came the "return the money" order from the CIT.
So now we have those ongoing duties and a gutted NAFTA, plus supervision of much of our forest law by Washington. Kind of makes you proud to be an allegedly sovereign Canadian, doesn't it? But there are still potholes on this road of shame. The legal situation remains murky and our industry may yet manage to exploit it. And a guaranteed way out lies in the Canadian Senate.
The tax legislation required to implement the Sellout Agreement requires consent of the Liberal-dominated Senate. That body should hold the necessary hearings to reveal the whole rotten story. A Senate defeat of the agreement would force an election on the issue.
Good idea. Forestry and sovereign self-respect are so basic it would be a fitting topic.
ggibson@bc-home.com