Canada weigh­ing mul­ti­ple trade ac­tions against U.S.

The Hamilton Spectator - - CANADA & WORLD - ALEXAN­DER PANETTA

WASH­ING­TON — The Cana­dian govern­ment is threat­en­ing mul­ti­ple trade ac­tions against the United States in re­tal­i­a­tion for du­ties on soft­wood lum­ber, warn­ing that sev­eral U.S. in­dus­tries could be tar­geted in the event of a pro­tracted dis­pute.

A first salvo came from Prime Min­is­ter Justin Trudeau, who in a let­ter Fri­day in­formed B.C. Premier Christy Clark that he’s se­ri­ously con­sid­er­ing her re­quest for a ban on ex­ports of U.S. ther­mal coal and that fed­eral trade of­fi­cials are ex­am­in­ing it.

A broader threat is also in the works, said two govern­ment sources. It in­volves pos­si­ble du­ties against in­dus­tries in Ore­gon, which is the home state of a Demo­cratic se­na­tor who has been a hard­liner on the lum­ber dis­pute.

That state’s ply­wood, floor­ing, wood chips, pack­ag­ing ma­te­rial and wine are among the po­ten­tial tar­gets as the Cana­dian govern­ment has launched a search for ev­i­dence of il­le­gal sub­si­dies to busi­nesses in that state.

The sources in­sisted these threats are not in­dica­tive of any ad­di­tional hos­til­ity to Pres­i­dent Don­ald Trump and are sim­ply a one-off mea­sure — spe­cific to one dis­pute over soft­wood lum­ber, and one state, and one Demo­cratic se­na­tor.

There’s an easy so­lu­tion: a long-term soft­wood-lum­ber deal would put the is­sue to rest, one source said.

“We hope we don’t have to act,” said the source, speak­ing on con­di­tion of anonymity. “We hope this dis­pute can be re­solved.” The course of ac­tion be­ing con­sid­ered by the Cana­dian govern­ment is sim­i­lar to the process used in the U.S. that slapped a 20 per cent duty on north­ern lum­ber.

It in­volves a re­quest to the Canada Bor­der Ser­vices Agency to study il­le­gal sub­si­dies in Ore­gon, a process that would take sev­eral months.

The govern­ment says it has iden­ti­fied nine pro­grams in Ore­gon that as­sist busi­nesses, pri­mar­ily in lum­ber.

They in­clude: the Ore­gon Un­der­pro­duc­tive Forest­land Tax Credit, the Ore­gon For­est Re­source Trust, the Ore­gon Tree Farm Pro­gram, the Pa­cific For­est Trust, prop­erty tax ex­emp­tions for stand­ing tim­ber, a small win­ery tax ex­emp­tion pro­gram and other tax cred­its.

“It’s a real thing. Our of­fi­cials have al­ready been look­ing at this,” said one govern­ment of­fi­cial fa­mil­iar with the plan. “(Ore­gon Demo­cratic Sen. Ron) Wy­den has been a chief pro­po­nent for years of the base­less and un­founded claims against the Cana­dian soft­wood lum­ber in­dus­try.”

The se­na­tor’s of­fice replied that one party has a le­git­i­mate point here — and it’s not Canada. A Wy­den spokesper­son, Keith Chu, said U.S. lum­ber com­pa­nies are ad­vanc­ing the case on its mer­its: that Cana­dian com­peti­tors get sub­si­dized by cheap ac­cess to pub­lic land, and the U.S. Com­merce Depart­ment has agreed to du­ties.

“These threats (from Canada) ap­pear to be pure po­lit­i­cal re­tal­i­a­tion,” Chu said.

It’s all hap­pen­ing in a broader cli­mate of trade ten­sion.

Trump’s re­cent digs at Canada — cou­pled with his em­brace of “Amer­ica First” trade na­tion­al­ism, his full-throated sup­port of what was a widely ex­pected duty on lum­ber, and his com­plaints about Cana­dian dairy — have drawn re­ac­tions north of the bor­der.

The strong­est re­sponses have come from pro­vin­cial gov­ern­ments.

On­tario is re­port­edly ex­am­in­ing tar­gets for re­tal­i­a­tion in the event of any new Buy Amer­i­can pro­vi­sions. And B.C.’s premier has turned a threat of re­tal­i­a­tion into the cen­tre­piece of her elec­tion cam­paign. But a for­mer diplo­mat urged cau­tion. Clark’s threat to ban or tax U.S. ther­mal coal would be against Canada’s own in­ter­ests, said Colin Robert­son, a for­mer mem­ber of Canada’s NAFTA ne­go­ti­at­ing team.

“You don’t want to stop the Amer­i­cans us­ing our ports,” Robert­son said.

“I’d be sur­prised at hav­ing in­vested so much over the last decade — by the Martin govern­ment, the Harper govern­ment and the Trudeau govern­ment, at least in the early stages — that you would want to take ac­tions that would make it more dif­fi­cult for the Amer­i­cans to use our ports.”

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