Economy: US/Canada Trade: Martin's anti-US NAFTA speech draws Lib ire

Canada's Prime Minister Paul Martin is now drawing considerable flack, not only from the opposition parties, but from within the ranks, even the Ministers of his own Cabinet. The nervous outrage mixed with dispair comes from Martin's explicit linking American anti-Canada softwood-lumber policy with a forthcoming Canadian anti-American oil/gas supply policy, now linked in the minds of the trade assembly he addressed in NYC recently and later that nite in an interview on CNN. ["Martin's U.S. speech draws fire," by Michael Den Tandt, Globe&Mail, Toronto, Oct 8, 2005. Click the blue headline above for a live-link the article.]

Ralph Goodale, Martin's Finance Minister, and John McCallum, Energy Minister, went into denial to spin no linkage and no threat. On the other hand, former Cabinet minister under Martin's predecessor, hailed the PM's manoeuvre. The nub of the issue was a recent decision of a panel of the North American Free Trade Association which ruled against Canada on softwood lumber, while subsequently a ruling of the world Trade Organization ruled in favour of Canada. But the NAFTA Treaty (US, Canada and Mexico) has a clause making its rulings on issues between its parties as final. Canada's appeal to the WTO ruling is just irrelevant.

Still, tho Canada does subsidize its softwood industry, Martin's move must be recognized as gutsy. It did get attention. But it simply will go nowhere because of the stranglehold the US softwood-lumber industry has on the US Congress on the issue. The NAFTA panel is influenced by all the forces at play, to the definite detriment of US softwood consumers - which include individual home renovators and builders, emergency home-building nonprofit groups in the Hurricane zone, and profitmaking home-construction firms there and thru-out the USA.

Canadian business leaders outside the lumber industry were quick to point out the gimmickry and election-oriented aspects of the PM's move. - Politicarp