By many measures, the U.S. relationship with Canada is its most important. After all, Canada is its most important trading partner and shares the longest border with the U.S. Yet how to explain the continuing recent war of words
between the U.S. and Canada. After new U.S. ambassador to Canada David Wilkins chided the Canadian government for "emotional outburts" about the ongoing softwood lumber dispute, Canadian Industry Minister David Emerson provided this outburst
:Are we going to stand together? Are we going to unite? Are we going to be stronger than the sum of our parts, or are we going to endlessly be bickering amongst ourselves and allow the bully to basically mop the floor with us?
Not only are Canadian leaders furious, but they must even more furious that their fury is essentially being ignored by the U.S. media and public (as the NYT notes here
Sometimes, the Canadian image of themselves being ignored and bullied by the U.S. is accurate. I don't think, though, that this is one of those cases. The U.S. actually has a somewhat defensible legal position
, certainly more defensible than I first thought from reading Canadian media descriptions of the U.S. "ignoring" the NAFTA ruling. The U.S. does not believe that it has an obligation to comply with the most recent NAFTA decision on softwood lumber because the U.S. International Trade Commission made a new 2004 determination
of (presumably new) injury caused by Canadian subsidies. This new determination was not examined in the NAFTA proceeding (which ruled on a 2002 ITC determination that was implemented. see here
for the full NAFTA decision.). Moreover, that new 2004 determination was made in response to a WTO panel decision on this same dispute. Indeed, the WTO issued another ruling yesterday
that backed up the U.S. position. Here is the U.S.T.R. spokesman's explanation
of this interpretation here and a further statement here
Bottom line: The Canadian government is definitely overreacting here by claiming that this lumber dispute is about respect or compliance with the NAFTA process. After all, the U.S. is acting here in compliance with the WTO process. So what we have here is a messy dispute flying back and forth between two different international dispute resolution systems which may or may not be in conflict with each other. In such a mess of a dispute, a negotiated settlement may be the more efficient solution.
Canadian leaders, however, prefer to whine about U.S. bullying and petulantly refuse to negotiate. All this pouting, however, is going to only reinforce Canada's image among Americans as a country we don't have to take seriously.