Crawl Across the Ocean

Thursday, April 27, 2006

Deal or No Deal

I don't really have much to say about the proposed softwood lumber deal other than that I don't like giving in to bullies and that rushing negotiations to suit political purposes weakens your bargaining position.

Paul Willcocks has a good summary of the concessions made by the Canadian side in order to reach a deal.

The one thing that surprises me is that everyone seems to be analyzing the pros and cons of the proposed deal under the assumption that the U.S. will abide by it. Given that we wouldn't be in this situation if they were abiding by the last agreement we signed, I don't see any basis for this belief - unless it is because people think this is enough of a sweetheart deal for the Americans that they won't want to break it.

4 Comments:

  • ...everyone seems to be analyzing the pros and cons of the proposed deal under the assumption that the U.S. will abide by it...

    Good catch. "You have to laugh, because it hurts too much to cry..."

    By Blogger deaner, at 1:52 PM  

  • The main goal of the US duties, which was to damage our industry, has long been accomplished.

    If this deal closes, the secondary goal of this trade dispute will be accomplished. The authority of NAFTA will have been successfully undermined.

    NAFTA was supposed to be an ironclad agreement which, among other things, would protect businesses from manipulative government policies. Somehow, it's devolved into GATT: An agreement to play nice with no enforcement mechanism when signatories don't play nice.

    So, can anybody think of some US products they'd like to place trade restrictions on? I can think of one suspicious gasoline additive off the top of my head.

    http://www.canadiandriver.com/articles/jk/020821.htm

    If Ethyl Corp. complains to NAFTA, so what? NAFTA obviously has no authority.

    By Anonymous Famousringo, at 11:54 AM  

  • "So, can anybody think of some US products they'd like to place trade restrictions on?"

    Wine - lots of substitutes available, and production is concentrated in three or four states - that concentrates the pain, and hence the poitical pressure.
    Construction Equipment - the Tar Sands are going to be a huge buyer of equipment, as is the mining sector (and ironically, forestry), and I imagine Caterpillar, Terex, and John Deere would prefer to get the orders than to see them go to Hitachi, Komatsu, or Fiat Allis. To add insult to injury, we could adopt a Helms-Burton rule, and either prohibit foreign subsidiaries from buying US-made heavy equipment, or give tax preferences to those who buy non-US source toys. Canada is one of the global leaders in international mining, and changing the buying habits of Canadian companies operating internationally would get attention.
    Aircraft - Canada is not a large market, but tossing Boeing out of the running for civil and military procurement would bring one of the loudest voices in Washington into the picture. Telling them that Canada's military will not buy equipment from an "untrustworthy supplier" (ie, any company sourcing from the US) might let the 'mericans understand how we view their continued disregard for the agreements they have signed

    By Blogger deaner, at 11:26 PM  

  • For us out here on the Wetcoast there is something very important to consider.....

    What happens to all that cheap beetlewood that must be cut down before it turns to dust?

    This deal, with its tax that kicks in when the price falls ensures that it will be shipped as raw logs to the Far East.

    Which means, of course, that the Canfors amongst us have a ready out when it comes to shrugging their shoulders and avoiding paying NAmericans to turn it into lumber.

    .

    By Blogger Gazetteer, at 11:56 PM  

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