Friday, December 16, 2005

It's really quite simple.

Americans seem to be puzzled as to why Canada is so upset with them over a trade dispute. In fact, many Americans don't even know what the dispute is all about. I'll try to simplify it for you, since your press seems to have left out a few important details.

We signed an agreement with the US a while back called NAFTA. It was supposed to create a free trade zone between Canada, the US and Mexico. Note the word 'free'. The duties that blocked free trade over the years were supposed to be eliminated. Unfortunately, the US decided that Canada was unfairly subsidizing softwood lumber production, which undercut the American softwood industry. So to level the playing field, they imposed a 27% duty on all softwood entering the US from Canada. We cried foul and won every case brought before the NAFTA tribunal, the last being on August 10, 2005. So, quite simply, we want the $5 Billion back that was charged in duties and the US is having none of it.

We signed up for unconditional, not selective free trade. Are we guilty of unfairly subsidizing some of our industries? Maybe. But we are certainly not the only ones guilty of that. So if you're wondering why our politicians are making a big deal out of this - it's because it is a big deal. If both sides cannot agree to play by the rules then there's no point playing at all. And for America to accuse Canada of treating a supposed friend unfairly, let us just remind the US that even though we strongly contested the duties using the built-in resolution system, we never fought back with duties of our own. Such as duties on our oil.

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