Friday, November 25, 2005

Canada Whacks the U.S. with a $1.3 Billion Lumber Subsidy

Less than a week after the U.S. surrendered to a NAFTA tribunal's order to eliminate U.S. duties on Canadian lumber, Canada brazenly announced yesterday that it would add a $1.28 billion subsidy to existing supports for the Canadian lumber industry. In other words, just as the U.S. dropped its duties in a good faith gesture, Canada has decided to whack the U.S. by adding even more subsidies to its (already wealthy and prosperous) lumber industry.

This little episode reminds us that there are no good guys or bad guys in most international trade disputes. The U.S. has been dilatory in its response to NAFTA judgments. But for all their posturing about respect for international trade rules, Canada's leaders have proven themselves to be relentlessly pursuing their industry's advantage, even against the spirit of the NAFTA trade rules.