US Trade Rep Might Challenge Canada's Media Laws

[YankAbroad]

A friend of mine who works with folks who work for the US Trade Representative tells me that the government in Washington is considering retaliating for the soft lumber lawsuits with a similarly NAFTA-based broad attack on Canadian media laws, which ban watching foreign satellites, heavily tax recorded media, subsidize Canadian artists, and tax/restrict American media being viewed, played or accessed in Canada.

They are fairly confident the action will be successful since the clause which precludes culture from NAFTA also precluded natural resources like soft lumber. The Liberal government's action to get that clause struck down now opens up the entire Canadian media/culture regulation sphere to a NAFTA-based action.

Pretty clever.

My question is -- would Canadians rather see soft lumber not taxed and also see their government's anti-competitive media policies revoked? Or is there a special right for Canadians to sell lumber without taxes in the USA, but not have Americans sell media without taxes and restrictions in Canada?

[mcqueen625]

I would welcome that initiative with open arms because I am sick to death of mediocre Canadian productions not only subsidized by Canadian tax-dollars, but in many cases paid for outright with tax-payer's dollars.

I have satellite through Bell ExpressVu and the movie channel are not even woth subscribing to since most of it is either dubbed or subtitled. On top of that I am forced to subscribe and pay for channels I cannot understand nor do I want because they are produced in the French language. I have no problem in having French channels on the air, but let those who want to subscribe to them pay the costs of those those stations, don't legislate that we all must pay. I would rather watch American programming since it is produce primarily in the English language. That's not being bigoted or discriminatory that's just a fact of life, that I souldn't have to pay for something I do not want.

[GostHacked]

I would welcome that initiative with open arms because I am sick to death of mediocre Canadian productions not only subsidized by Canadian tax-dollars, but in many cases paid for outright with tax-payer's dollars.

Then stop buying it if you do not like it. Easy.

I have satellite through Bell ExpressVu and the movie channel are not even woth subscribing to since most of it is either dubbed or subtitled. On top of that I am forced to subscribe and pay for channels I cannot understand nor do I want because they are produced in the French language. I have no problem in having French channels on the air, but let those who want to subscribe to them pay the costs of those those stations, don't legislate that we all must pay. I would rather watch American programming since it is produce primarily in the English language. That's not being bigoted or discriminatory that's just a fact of life, that I souldn't have to pay for something I do not want.

Looks like you ARE paying for what you don't want. Cancell the service is quite easy.Find a new service that gives you what you want. Stop complaining and just go to a different company. You have the choice. And we all know the courts voted in favour of Canada in each of these disputes regarding lumber with the US.

[Riverwind]

They are fairly confident the action will be successful since the clause which precludes culture from NAFTA also precluded natural resources like soft lumber. The Liberal government's action to get that clause struck down now opens up the entire Canadian media/culture regulation sphere to a NAFTA-based action.

If it was that simple the americans would have challenged the cultural provisions years ago. I believe softwood ended up being covered under NAFTA because of anti dumping duties come under another section. There are no duties on US cultural goods - simply regulations that Canadian companies must follow. The Americans may have avoided the NAFTA rules if they had simply passed a regulation that all new homes must be built with 80% US lumber instead of trying to block Canadian lumber at the border.

[Murray B.]

soft lumber not taxed

I'm sorry but you don't seem to understand what is going on here. It has nothing to do with lumber and Canada started it.

After the election the Canadian government let it be known in Washington that all Canadians would have preferred it if the Democrats would have won. Mr. Bush took this personal attack personally and our relationship soured after that.

The joke is on him, however, since an attack on B.C. will hardly be noticed in Ottawa. To them, the western provinces are just cows to be milked and what is one cow more or less to a big outfit like Canada? Heck, most central Canadians don't even know where British Columbia is.

If the President had come from a more northern state then he might have been more likely to threaten to shoot them right in the Bombardier. Unlike B.C. bashing this would have really gotten Ottawa's attention.

Anyway, next time you folks have a problem with the farmer, don't shoot the cow, Eh!?

[YankAbroad]

Dubya doesn't have a clue about Canada or much of anything else, but he loves his tariffs. It's not so much a swipe againt Canada as an effort to protect a domestic industry, ala his steel tariffs a couple of years ago.

I do have to say, however, that if the shoe was on the other foot and it was the US pressing to have Canadian tariffs refunded -- with the risk of Canadians losing jobs to more efficient US producers -- I don't think the same people now extolling the virtues of NAFTA in Ottawa would be doing so. Call me a cynic.

[Guest eureka]

You are probably right, Yank, but I do think that if a dispute panel had ruled against Canada, Canada would have accepted the ruling.

Or, invoked the escape clause and nullified the treaty if it was important enough as it would be on the cultural front.

[YankAbroad]

You are probably right, Yank, but I do think that if a dispute panel had ruled against Canada, Canada would have accepted the ruling.

Or, invoked the escape clause and nullified the treaty if it was important enough as it would be on the cultural front.

Frankly, if the USA nullified NAFTA, it would suffer no ills. It should be replaced with a real free trade agreement which bans subsidized products (like the soft lumber which the BC government sells below cost), and which allows full freedom of movement and labor.

NAFTA is neither free trade nor particularly North American.

[Riverwind]

Frankly, if the USA nullified NAFTA, it would suffer no ills. It should be replaced with a real free trade agreement which bans subsidized products (like the soft lumber which the BC government sells below cost), and which allows full freedom of movement and labor.

Gets your facts right. The stumpage rates charged by the BC gov't do not represent a subsidy because they come with all kinds of regulatory strings attached that increase costs for Canadian producers. For example, in the US the US gov't builds the roads that the logging companies use to cut lumber. In Canada the Canadian companies must pay those costs.

That is why the NAFTA panel ruled in Canada's favour. This the idea that Canadian lumber is subsisized is a myth created by US producers that want to line their pockets with extra cash at the expense of the American consumer.

[YankAbroad]

The stumpage rates charged by the BC gov't do not represent a subsidy because they come with all kinds of regulatory strings attached that increase costs for Canadian producers

The cost increases are still lower than the subsidies. The net result remains selling lumber below cost.

This the idea that Canadian lumber is subsisized is a myth created by US producers that want to line their pockets with extra cash at the expense of the American consumer.

Oh, don't get me wrong, I'd be happy to see the tariff go. I think Canada's culture and media laws, various anti-competitive tariffs on both sides of the border, and restrictions on labour mobility should all disappear.

[Riverwind]

The cost increases are still lower than the subsidies. The net result remains selling lumber below cost.

The trade panel did the calculations and ruled that there was no net subsidy. You are just repeating the baseless allegations of the US lobby.

Oh, don't get me wrong, I'd be happy to see the tariff go. I think Canada's culture and media laws, various anti-competitive tariffs on both sides of the border, and restrictions on labour mobility should all disappear.

So when do you think the US will open its border to unrestricted immigration from Mexico?

Culture is not a commodity to be traded like lumber - virtually every country in the world feels the same way. There is no way media developed for a target audience of 30 million people can compete on a level playing field with media developed for a target audience of 300 million people.

That said, Canadian media laws are fair to foreign producers since no one is prevented from selling their products in Canada. The only thing that the regulations do is ensure that Canadian products have a chance.

[America1]

Frankly, if the USA nullified NAFTA, it would suffer no ills. It should be replaced with a real free trade agreement which bans subsidized products (like the soft lumber which the BC government sells below cost), and which allows full freedom of movement and labor.

Gets your facts right. The stumpage rates charged by the BC gov't do not represent a subsidy because they come with all kinds of regulatory strings attached that increase costs for Canadian producers. For example, in the US the US gov't builds the roads that the logging companies use to cut lumber. In Canada the Canadian companies must pay those costs.

That is why the NAFTA panel ruled in Canada's favour. This the idea that Canadian lumber is subsisized is a myth created by US producers that want to line their pockets with extra cash at the expense of the American consumer.

Didn't the WTO rule in favor of the US?

[Riverwind]

Didn't the WTO rule in favor of the US?

The US went to the WTO and asked if it is theoretically possible for a stumpage based system to provide a subsidy. The WTO ruled that it is theoretically possible. However, the NAFTA panel actually looked at the facts and calculated all of the costs of Canadian regulations and concluded that there is no net subsidy.

In other words, the WTO ruling did not contradict the NAFTA ruling because it was ruling on a different and largely irrelevant question.

[Leafless]

America1

You wrote- " Didn't the WTO rule in favour of the U.S."

The lower single digit percentage what softwood lumber represents compared to total trade with the U.S. makes this a non-issue in my mind.

No matter how you look at it Canadian softwood lumber is being subsidized. The road issue I can not see as a valid point as these roads are the cheapest roads possibly constructed.

Maybe B.C. should consider building finished or partially finished wood manufactured products like pre-fab housing, roof trusses, furniture or whatever the main usage is for Canadian lumber in the U.S.

[Riverwind]

No matter how you look at it Canadian softwood lumber is being subsidized. The road issue I can not see as a valid point as these roads are the cheapest roads possibly constructed.

What makes you qualified to make those kinds of statements? Are you a forestry expert? The NAFTA panel had access to all of the studies and accurate information provided by experts on both sides. They reviewed the evidence and sided with Canada. The road issue is just one of many and contrary to what you might believe, building roads is extremely expensive - especially when you include environmental regulations designed to protect watersheds and salmon habitat.

Maybe B.C. should consider building finished or partially finished wood manufactured products like pre-fab housing, roof trusses, furniture or whatever the main usage is for Canadian lumber in the U.S.

This has already happened. In fact, the Canadian lumber industry is super competitive.

The entire softwood issue is about money. There are large players in the US that own huge tracts of forest land. If they can limit the supply of timber in the US then the value of their land goes up. These players would try to find some other excuse to limit supply even if Canadain adopted a US model for timber rights.

[Drea]

The softwood tariff is not on actual softwood (the tree/log). It's on MANUFACTURED softwood products.

If, and that is a great big "IF", Canada IS subsidizing softwood lumber then there should be a tariff on raw logs -- we ship our raw logs (thanks a freakin heap Gordo!) to the USA and there is NO TARIFF on those logs.

Stumpage is paid when a tree is felled, not when it is manufactured so I don't understand why the US doesn't tariff raw logs -- I guess because they NEED them, eh?!

[Riverwind]

Stumpage is paid when a tree is felled, not when it is manufactured so I don't understand why the US doesn't tariff raw logs -- I guess because they NEED them, eh?!

This is another aspect of the hypocritical US position. They pressure Canada to allow the export raw logs even though they prohibit the export of raw logs cut from US gov't land.

[tml12]

Stumpage is paid when a tree is felled, not when it is manufactured so I don't understand why the US doesn't tariff raw logs -- I guess because they NEED them, eh?!

This is another aspect of the hypocritical US position. They pressure Canada to allow the export raw logs even though they prohibit the export of raw logs cut from US gov't land.

I back Canada on softwood but I fault the Liberals.

They politicized the event to what (at the time) was to their advantage but as Harper correctly pointed out, the situation will take longer to be resolved because the Liberal government politicized the event instead of calling the Americans right away.

Harper will get this resolved ASAP.

[America1]

Didn't the WTO rule in favor of the US?

The US went to the WTO and asked if it is theoretically possible for a stumpage based system to provide a subsidy. The WTO ruled that it is theoretically possible. However, the NAFTA panel actually looked at the facts and calculated all of the costs of Canadian regulations and concluded that there is no net subsidy.

In other words, the WTO ruling did not contradict the NAFTA ruling because it was ruling on a different and largely irrelevant question.

You could have saved everyone time and said YES, instead of babling like a fool as you did.

[Riverwind]

You could have saved everyone time and said YES, instead of babling like a fool as you did.

What was your point of asking the question? To imply that the US tariffs were justified by a bogus ruling by the WTO?

[Drea]

So, America1, if the WTO ruled that Canada is indeed (theoretically) subsidising our softwood, why isn't there a tariff on raw logs? Why only manufactured wood?

[America1]

You could have saved everyone time and said YES, instead of babling like a fool as you did.

What was your point of asking the question? To imply that the US tariffs were justified by a bogus ruling by the WTO?

I asked the question to prove a point. This issue isn't as 'black and white' as you make it seem, all I hear from you is "The US is a big meanie to us the nice and fair Canadians". This is a cloudy issue with both sides feeling they are being screwed (and are probably are at certain points).

Funny how the U.N. and world organizations are always right when the US is being chastised but its a "bogus ruling" when it doesn't go your way.

[tml12]

You could have saved everyone time and said YES, instead of babling like a fool as you did.

What was your point of asking the question? To imply that the US tariffs were justified by a bogus ruling by the WTO?

I asked the question to prove a point. This issue isn't as 'black and white' as you make it seem, all I hear from you is "The US is a big meanie to us the nice and fair Canadians". This is a cloudy issue with both sides feeling they are being screwed (and are probably are at certain points).

Funny how the U.N. and world organizations are always right when the US is being chastised but its a "bogus ruling" when it doesn't go your way.

The UN is an important, although to be fair I must add, extremely corrupt and incompetent organization.

UN leaders see their primary position as attacking the U.S. and providing anti-U.S. coalitions.

While I do not like John Bolton, I have no doubt he will tell the UN off when they need to be told off.

The UN needs serious reform from the inside right up to Annan himself.

[Riverwind]

This is a cloudy issue with both sides feeling they are being screwed (and are probably are at certain points).

The difference opinion comes down to how the fair market value of raw logs is calculated. There is a lot of timber in Canada which means the price for raw logs in Canada tends to be lower than in the US. The US timber lobby insists on using US market prices to determine if there is a subsidy to Canadian producers. That is why they think they are being screwed. The trouble with the American position is trade law generally uses prices in the producing country to determine if a product is being dumped or subsidized. Using prices in the consuming country is generally not an acceptable argument. It is a bit like claiming Chinese products are subsidized because the cost of labour is much less in China.

Funny how the U.N. and world organizations are always right when the US is being chastised but its a "bogus ruling" when it doesn't go your way.

The WTO and NAFTA were asked two different questions. The WTO question is theoretical and is largely irrelevant. The NAFTA question means something because it considers the facts of the case. If the WTO was asked the same question and it ruled in favour of the US then it would mean something.

[Leafless]

Sparhawk

You wrote- " It is a bit like claiming Chinese products are subsidized because the cost of labour is much less in China."

Not really Sparhawk.

Lumber harvested off of Crown land as compared to private land cost of acquiring the same product is in fact the same as being subsidized by government.

Admit it, Canada is no longer competitive in certain areas of forest products because of lower demand especially for newsprint, plywood and veneer.

Your Chinese philosphy is really a double edge sword as their are many foreign factories in China thus capitalizing as a private foreign owned manufacturing facility but using Chinese labour. This is not the same as a fully owned Chinese manufacturing facility but is slowly changing in that direction.