Better than nothing: That's the real dirt on the softwood deal

L'entente Canada - États-Unis sur le commerce du bois d'oeuvre

Nothing leaves you feeling grimier than spending time around the softwood-lumber file.
Having concluded what was supposed to be the absolutely, positively, i's-dotted, t's-crossed final text of a softwood-lumber agreement with the United States last weekend, the Conservative government now finds itself under attack from furious lumber producers and the government of British Columbia. Both maintain Canada has been snookered by the wily Yanks at the last minute, and want the deal reopened.
At the heart of the matter is an escape clause, forced on the Canadians by the U.S. negotiators, handing either side (really, just the American side) the right to give notice after 23 months that it wants out of the agreement, which would then terminate a year later.
So, a seven-year deal could become a three-year deal, and then negotiations (accompanied, no doubt, by fresh American tariffs) would start all over again.
No wonder the Canadian lumber industry isn't happy. Because the lumber companies must drop their lawsuits for the deal to take effect, which many are now threatening not to do, some observers predict this agreement will die, unless Ottawa can get the Americans to relent.
Stephen Harper's government, however, is unlikely to ask the Americans to return to the table. Instead, it will try to stare down provincial and industry opposition. For the sake of the industry, we should hope it succeeds.
Industry executives who oppose the final text of this agreement need to consider the future that would await them if it fails.
They would lose the $4-billion they are due in refunded duties from the Americans, and could face new and higher tariffs.
They would lose any financial and legal assistance from the federal government, which would wash its hands of the file, claiming softwood lumber had joined amending the Constitution on the list of impossible political tasks.
And they would strengthen the already mighty hand of the U.S. lumber lobby. The Canadians will never sign a deal with us, the Yankee lumber execs would tell congressional politicians (after pulling them out of their pocket). Let's make the sanctions even tougher, to teach the Canucks a lesson.
Of course, Canada could always continue with its legal challenges to the American tariff. But President George W. Bush's administration has made it clear that it will ignore any rulings that go against it, unless and until the Supreme Court orders it to do otherwise.
It would take years before the court could be expected to hear the softwood case. By that time, the stakes would be so high that the very constitutionality of the North American free-trade agreement could come into question.
To win in the courts on softwood lumber, at the cost of losing NAFTA, would be a truly epic Pyrrhic victory.
Let's be clear: This is a lousy deal for Canada. The Americans get to keep $1-billion in duties that they took from us illegally. Trade in softwood lumber will be carefully managed, in the American interest.
But this lousy deal is the only deal available. The fact remains that the Americans have something we badly need: access to their lumber market. This is the price we have to pay for that access.
Domestically, Mr. Harper will use his favoured strategy: Propose a solution and defy the opposition to torpedo it. Implementing legislation reaches Parliament this fall.
The opposition parties, lumber executives and B.C. Premier Gordon Campbell will then have a choice: Swallow hard and let the agreement go through, or scuttle it and brace for the consequences.
Emotion and political calculation will play their part. But understand, folks: It's this deal or we go back to court. And where has that ever gotten us?
On the other hand, it shouldn't come as a surprise if you feel a need to take a shower.

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