New movements by the Canadian and US governments, as well as provincially in Quebec and British Columbia on softwood lumber trade between Canada and the US.
British Columbia Premier Christy Clark Monday announced a former federal cabinet minister has been appointed the BC government’s trade envoy to try and reach a new softwood lumber deal with the United States. The province says David Emerson will also work with the federal government to get a new agreement.
Emerson served in a number of federal cabinet portfolios for the Liberals and Conservatives including industry, foreign affairs and trade.
As trade minister, Emerson signed the last softwood lumber agreement in 2006, ending the fourth Canada-US lumber dispute.
The BC envoy to Washington, DC, is charged with making a case for British Columbia’s softwood lumber industry in hopes of reaching a new trade agreement with the US.
BC APPOINTS SPECIAL LUMBER ENVOY
Clark said there were plans for BC officials to meet with Canadian Ambassador David MacNaughton, to get a better sense of how to present their case on Washington.
“There isn’t a strong sense yet of where … the Americans want to go on it — so he’s going to be coming up and meeting with our cabinet in the next week or so and we’ll be spending as much time as we need to with him to understand broadly what’s happening down south,” said Clark.
Clark spoke with former prime minister Brian Mulroney for guidance in choosing the envoy. It was during Mulroney’s time in office that the free trade agreement between Canada and the US was introduced.
NORTH AMERICAN FREE TRADE AGREEMENT
The process for making big changes to NAFTA has started, according to The Economist Thursday. On February 3rd the Mexican government began a 90-day consultation with businesses on what its negotiating position should be. Wilbur Ross, who will lead the American negotiators after the Senate confirms him as commerce secretary, says NAFTA is “logically the first thing for us to deal with”. Notification to Congress, which must happen 90 days before talks can start, could come soon.
Mr Ross’s language is less alarming than that of his soon-to-be boss, The Economist said. Yet he may do no more than put a friendlier face on Mr Trump’s protectionism. A billionaire investor in old-technology companies that benefit from protection, Mr Ross is no free trader. According to a report by the Globe and Mail, he has identified two priorities for NAFTA renegotiation: the dispute-settlement process and “rules of origin”. These rules put a ceiling on the value of inputs that an exporter to another NAFTA country can buy from outside the area. Both ideas are contentious.
The United States has long grumbled about the independent NAFTA panel that rules on anti-dumping duties, which a country imposes when it thinks that its trading partner is competing unfairly. It has ruled, for example, that duties on softwood lumber from Canada are a violation of American law. Mr Ross is likely to demand changes that weaken the panel.
One of the trade agreement’s original negotiators and most ardent champions of NAFTA says the deal is out of date and needs to be brought into the 21st century, according to The Star February 1.
Mickey Kantor was the negotiator brought in by Bill Clinton to finalize the deal in 1993, when the then-rookie president promised to add side agreements on labour and the environment and appointed Kantor as his first US trade czar.
He remains a huge booster of the pact — he says it has promoted economic growth in all three signatory countries, in addition to encouraging more harmonious relations between neighbours.
Kantor said he would advise a Trump administration to make that among its top priorities. Indeed, Trump has promised to renegotiate or scrap the treaty, which has caused some anxiety among US neighbours who send the overwhelming majority of their exports to the U.S.
Both Canada and Mexico have responded to the election result by saying they’d be willing to sit down for a discussion, prompting more debate about whether they’ve weakened their negotiating position with Trump.
A third former U.S. trade representative, Robert Zoellick, has suggested inviting the United Kingdom into NAFTA — especially as that country seeks new trade relationships in light of its vote to leave the European Union.
There are pros and cons to talk of reopening NAFTA, said Canadian trade lawyer Mark Warner.
A more modern trade deal could indeed produce better standards for labour, the environment, state-owned enterprises, fighting corruption and resolving disputes, as adjusted in more recent agreements, Warner said.
It would also allow Canada to revisit the energy rule that forces it to sell a certain amount of oil to the U.S., potentially limiting its options with market diversification. In addition, he said Canada could seek more beneficial rules on government procurement and worker mobility.
BC SOFTWOOD LUMBER LOBBYING
The BC Lumber Trade Council and provincial government said Monday they will try to convince American consumers, politicians and lumber buyers that an equitable softwood lumber deal is needed to avoid the damage that will result from import restrictions into the U.S. and higher prices, according to Canadian Press.
Susan Yurkovich, the president of the council, and B.C. Forests Minister Steve Thomson said no budget has been set for the lobbying effort, though they expect fees covering legal, consulting and advertising costs will add up.
QUEBEC CONCERNS
Concerns about layoffs in the forestry sector, an important economic driver in Quebec, prompted Premier Philippe Couillard to commit to providing loan guarantees to help producers pay duties if the federal government doesn’t, said Canadian Press.