- Just a week before George W. Bush arrives for a feel-good visit with Paul Martin, Ottawa is talking tough about a possible trade war with the United States.
The federal government announced Tuesday that it is launching consultations with Canadians on possible retaliation over American duties. It's all about the Byrd Amendment, which allows American companies to receive anti-dumping and countervailing duties collected from foreign competitors - such as those on softwood lumber. The U.S. has failed to act on a World Trade Organization (news - web sites) ruling that the amendment is illegal.
"Retaliation is not the preferred course of action, but this is about respecting international trade laws," Trade Minister Jim Peterson said from Brazil, where he is on a trade mission.
It looks like Bush is about to snub Canada and dare them to initiate a trade war. I can't imagine any other outcome. This man doesn't admit mistakes and is already on record that he won't back down on this one. Again defying international law. Incredible arrogance!
Complete Article
Canada warns of looming trade war as Bush prepares to visit
1 hour, 54 minutes ago
MARTIN O’HANLON
OTTAWA (CP) - Just a week before George W. Bush arrives for a feel-good visit with Paul Martin, Ottawa is talking tough about a possible trade war with the United States.
The federal government announced Tuesday that it is launching consultations with Canadians on possible retaliation over American duties.
It's all about the Byrd Amendment, which allows American companies to receive anti-dumping and countervailing duties collected from foreign competitors - such as those on softwood lumber.
The U.S. has failed to act on a World Trade Organization (news - web sites) ruling that the amendment is illegal.
"Retaliation is not the preferred course of action, but this is about respecting international trade laws," Trade Minister Jim Peterson said from Brazil, where he is on a trade mission.
"These consultations are an important step in protecting the rights of Canadian industry."
While the sabre-rattling comes a week before Bush's visit, that's just a "sheer coincidence," said a government official.
The official, who asked to remain anonymous, said the government had to make its intentions known in order to be in line with other countries seeking trade retaliation against the U.S. at a WTO hearing Wednesday.
The public consultations, while not required, are part of an effort to include citizens in the process, said the official.
"We're not saying we're going to (retaliate) or not. We're just showing that we're serious."
But a source close to negotiations suggested Ottawa will take action if the U.S. doesn't back off.
"At the end of the day, we're going to protect our industry," said the source.
Bush is coming to Ottawa on Tuesday as part of a second-term effort to mend international relations in the wake of the Iraq (news - web sites) war.
Martin has said he will raise key trade irritants such as softwood lumber and mad cow, but that the big problem lies in the U.S. Congress.
Canadian lumber exports to the U.S., worth about $10 billion annually, have been subject to heavy duties since May 2002.
The U.S. maintains Canadian producers have an unfair advantage over their American counterparts through lower stumpage fees - the fee to cut wood on Crown land.
Canadian producers have paid more than $3 billion US in cash deposits - mostly held in trust - and the Americans want to give that money to U.S. firms.
John Allan, president of the B.C. Lumber Trade Council, welcomed the government's action.
"Given that the U.S. has not complied with the WTO . . . we have no choice but to pursue our rights," he said.
Allan said that as a political tactic, the latest move is a "minor bargaining chip."
"But in a major way, we're in a legal fight for our lives. . . . The U.S. isn't going to respond to anything but economic pressure."
On Aug. 31, the WTO ruled that Canada, Brazil, Chile, the European Union (news - web sites), India, Japan, Mexico and South Korea (news - web sites) could retaliate by up to 72 per cent of the annual anti-dumping and countervailing duties on exports disbursed to U.S. companies in a given year.
On Nov. 10, Canada joined in submitting to the WTO the final retaliation authorization request, which is required by the WTO before any retaliatory measures can be applied.
The request is to be considered at a meeting of the WTO on Wednesday and automatically authorized unless it is unanimously rejected by WTO members.
Anyone who would like to be involved in Ottawa's consultations is asked to comment by Dec. 20, through the International Trade Canada website at byrd-consultations.gc.ca.
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