We Told You NAFTA Was A Bad Idea

US Trade Court Rules for Canada in Softwood Lumber Dispute

There were some of us that opposed the passing of NAFTA. NAFTA passed muster on the Clinton watch, and Clinton embraced it, but it was a wrong-headed agreement that gave more power to importers of goods to the US than to exporters of goods to Mexico or Canada... and an impetus for US businesses to pack up shop and move to Mexico where labor costs are a third of costs in the US and regulations are not only less stringent, but less enforced and easily bypassed with the proper greasing of a palm.

The proof, in this case, is in the court decision. The effort to implement protective taxes and duties on softwood imports from Canada failed to meet the legal requirements of NAFTA. While not a fan of protective taxation as an effective tool for competitiveness, the tactic is used to create national control over certain products and services. It keeps US goods out of Japan and actually prevents our industries from being forced to innovate, update and become competitive.

The US Court of International Trade ruled Friday that the US must abide by a North American Free Trade Agreement panel ruling that improper duties were levied on Canadian softwood lumber used in US housing construction jobs. The president of the British Columbia Lumber Trade Council, John Allan, said $1.2 billion in duties collected by the US since November 2004 would need to be refunded as a result of the ruling. The court is still considering what action to take on the $3.4 billion in duties paid by Canada before November 2004.

The court's ruling is expected to have an effect on a softwood lumber trade agreement that Canada and the US initialed earlier this month, but which the Canadian lumber industry has been hesitant to approve. The 7-year deal intended to end the long-running softwood lumber dispute between the two countries would reimburse $4 billion to Canada but would allow US lumber producers to keep $1 billion. Canadian critics say their government was too lenient in drafting the deal and lumber industry members have specifically opposed a clause that would give the US the option to walk away and re-impose duties.