The current debate on the proposed softwood lumber deal with the United States has focused on its terms and whether it could benefit the Canadian lumber industry. I do not believe that it would. But far more important is the impact that such an agreement would have on NAFTA itself.
The original U.S.-Canada free-trade agreement was born with a near-fatal flaw. Ottawa accepted what should have been regarded as an impossible demand by Washington. The Mulroney government, in its eagerness to get a deal, accepted that the United States could continue to pursue its "trade remedies" (anti-dump and countervail to the cognoscenti) against whatever it chose to regard as unfair trade practices by Canada, trade remedies that, by any logic, have no place and, indeed, are wholly incongruous in any true free-trade agreement.
In effect, Washington said Congress regards the commerce power as its constitutional prerogative that no international agreement could dilute. The most that the United States would do was to agree to submit whatever "trade remedies" it chose to impose on Canada to review by its own (not NAFTA) tribunals. Ottawa, in its eagerness to get what it regarded as a rules-based agreement to replace the capricious U.S. trade practices of the past, accepted a U.S. condition that has enabled capriciousness to continue, pre-eminently but not exclusively, with regard to softwood lumber.
As for the softwood lumber draft agreement, Washington, in pandering to narrow domestic interests, has consistently disregarded the rulings of its own tribunals, most notably the recent finding of its own Court of International Trade that the United States has violated the terms of NAFTA by its various actions to obstruct the free access of Canadian lumber to the eager U.S. retail market.
The draft agreement leaves the door open to Washington to respond to domestic political pressure by reintroducing protectionist measures in a matter of two years hence. But, far more important, the agreement would undermine NAFTA itself. If Ottawa accepts that Washington can disregard its terms, that it can disregard the findings of its own tribunals in the case of softwood lumber, what safeguards would Canada have left against the likelihood that the United States, building on the softwood precedent, would apply its "trade remedies" against other imports from Canada?
The softwood lumber deal should be rejected. Real settlement should continue to be pursued in the U.S. courts where U.S. practices can be successfully challenged and NAFTA upheld.
Otherwise, we might as well recognize that NAFTA has been fundamentally undermined.
Roy MacLaren is a former federal minister of international trade and high commissioner to London.
