RETALIATION EYED IN LUMBER SCRAP
Retaliation on world’s largest economy could backfire: experts
If the United States refuses to come to the negotiating table, and the legal wrangling over the softwood lumber dispute drags on, Canada may want to consider retaliatory action, according to the man tasked with representing British Columbia in the matter.
A day after the U.S. imposed duties averaging 20 per cent on lumber shipments to the U.S, David Emerson, B.C.’s special trade envoy to the U.S., said there might be means of getting the Americans to move off their stance that Canada’s lumber industry is unfairly subsidized.
Asked if there’s anything beyond the legal route Canada could do to push for a negotiated settlement, Emerson suggested retaliation is an option.
“There’s always a big debate as to whether a country wants to link one trade issue with another. It’s a slippery slope and while it often happens quietly and implicitly, very seldom is it done in an open and transparent way,” Emerson said.
“I think, though, if this dispute does not show evidence of moving into a solution phase relatively expeditiously, you will see some governments in Canada look at what their options are in terms of some kind of implicit reaction or retaliation.”
But Emerson would not suggest what kind of bargaining chips — energy, water and the like — Canada may have to leverage in the dispute.
However, it appeared Wednesday that Premier Christy Clark is willing to wade in. Clark calling for the Canadian government to ban thermal coal shipments — most of which originate in the U.S. — through B.C. ports on the way to Asia.
Clark said she has written to Prime Minister Justin Trudeau asking that the federal government impose the ban to send a strong message to the Trump administration in defence of B.C. forestry workers.
Clark did not directly link the move to the softwood tariffs, saying she has been considering the move for a long time due to the negative impact that burning coal has on the environment.
Clark said she was reluctant to press the issue before now for fear of upsetting ongoing softwood negotiations with the U.S. and jeopardizing forestry jobs.
“Well, now that they’ve slapped a duty on Canada and they’re calling us names, we’re free to take an action that’s long overdue,” she said, noting that U.S. President Donald Trump raised the stakes again Wednesday by threatening to pull out of the North American Free Trade Agreement.
“They are no longer good trading partners to Canada, so that means we’re free to ban filthy thermal coal from B.C. ports and I’m hoping that the federal government will support us in doing that,” she said.
Experts in international trade have warned, however, that Canada and the province play a losing game when taking on the massive U.S. economy.
“We cannot win that game. The best we can do is lobby and sit down at the table,” said Cornelis van Kooten, Canada research chair in the University of Victoria’s department of economics.
Kooten said if Canada decides to play a game of tit-for-tat with the U.S., it needs to worry about what retaliation the largest economy could enact.
“What would they turn around and try to do to us? Ban gasoline coming to Canada?” he said. “I’m really not sure what we really have to bargain with. If you look at Canada, what are we? We are still drawers of water and hewers of wood when it comes down to it.”
Charles Krusekopf, faculty lead for international business at Royal Roads University, said there are other considerations in going after the U.S.
“The challenge here is it is outside of an established process,” he said of the legal fight Canada has ahead of it under NAFTA and through the World Trade Organization, where it has been successful on softwood in the past.
He said Canada would be in a legal position to retaliate if it once again scores a win at a NAFTA or WTO tribunal and the U.S. does not comply.
If Canada decided to limit its exportation of oil to the U.S., the Americans could just look to the international market to make up the difference, he said. “It seems to me, that in that sense, Canada’s actions are fairly limited.”
In response to Clark’s comment on coal, B.C. Green Party Leader Andrew Weaver said it was long overdue. “The expansion of B.C.’s thermal coal exports should have been halted long ago so that B.C. could be a leader in climate action and in the tremendous economic opportunities that come from developing the renewable energy sector,” he said.
“I sincerely hope that this move the premier has made is more than just election politics.
NDP Leader John Horgan issued a statement slamming Clark for putting jobs at risk by failing to get a softwood deal with the U.S.