David Emerson, Softwood Hero?

[geoffrey]

-Canadian lumber firms would cap its exports at 34 per cent of the U.S. market, which is roughly Canada's current share. That share would be broken down regionally, based on 2004-05 exports.

-The U.S. would lift its 10 per cent duty and return about 78 per cent of the $5 billion it collected in anti-dumping and countervailing duties beginning in 2002.

-Ottawa would impose an export tax which would vary according to lumber prices, export levels and the value of the Canadian dollar.

-A "surge mechanism" would penalize a region if its exports exceed 110 per cent of its allocated share.

-The deal would be for seven years, with the option of extending it another two years.

-The terms also include dropping numerous lawsuits in the battle, said Wolff, who says Canada has launched 10 legal challenges for every one on the American side.

SOURCE: http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

--

Well ladies and gentlemen. We won. It's a billion bucks lost to the States, but I've already suggested that our industry has unfairly low stumpage costs. We've earned alot more in giving up that billion then we would have holding out any longer. The cost in your tax dollar paying the EI for lumber workers and bailing out dying business would be much higher over years and years of fighting this.

All agreements require some compromise. Having the Americans accept 100% of Canadian terms would not only be unexpected, but an irrational demand in any negotiation processes when conducted on good terms.

This is not a fair deal for both sides of the border... this is a great deal for Canada.

David Emerson and Michael Wilson are in Washington now, just having concluded the agreement. Our former embassador just hung his head in shame on Don Newman's CBC show, admitting that he couldn't get the US agree to the same amazing deal.

David Emerson could only have used his power to save Canadian taxpayers money, to save the industry from destruction, being in cabinet, fighting for the constituants of his riding and province. We would have no deal if he bowed to NDP demands run in a by-election. The cost would be embarassing, but then again, when does the NDP care about taxpayers?

Quebec, Ontario and British Columbia... those provinces with lumber industries... all endorsed the new terms.

Count one in the major successes for the CPC. Let's see if they take more pro-business, pro-trade measures that help all Canadians in the coming months.

[geoffrey]

In addition to my previous post... All future duties that may be collected, will be collected on the Canadian side of the border and the money will remain in Canada.

[lost&outofcontrol]

In addition to my previous post... All future duties that may be collected, will be collected on the Canadian side of the border and the money will remain in Canada.

Won't the US side get to keep 20 cents on the dollar? I'll post my opinion on the deal once I get more info.

[geoffrey]

In addition to my previous post... All future duties that may be collected, will be collected on the Canadian side of the border and the money will remain in Canada.

Won't the US side get to keep 20 cents on the dollar? I'll post my opinion on the deal once I get more info.

Somewhat correct. My understanding is that we are asking for $5b Canadian, and the US is paying $4b American. So the difference is less than 20 cents, but the difference is real.

The fact of the matter is that this small $1b cost is minor compared to the costs on the communities, families and businesses that are being destroyed by lack of resolution. In all negotiations you must be willing to give a little to get a little.

We got a lot more out of this deal, I view this pragmatically.

[shoop]

Don't think this is as positive as you make it sound. Ontario does not sound very happy at all with the deal.

That being said I think this is a prime example of the difference in governing styles. Scuttlebutt is that the Liberals were close to a deal last fall. They didn't announce it because they were afraid of not getting 100% positive reviews.

Looks like the Government has decided to make as good a deal possible instead of hurting the industry in the country by holding out for a perfect deal that will never materialize. Wow, a mature government decision. Wonder how Paul Martin feels about that?

[geoffrey]

Agreed shoop on the mature government action.

I think this is a great deal, as in, the best deal we could ever have worked out. The greatest deal would be the US paying us trillions in fees and things like that forever. Obviously that's not realistic.

Negotiations are based on winning some, and losing some. Negotiated settlements always work out better in the long term than legally imposed ones. There could not be a better negotiated settlement.

[Kiraly]

Somewhat correct. My understanding is that we are asking for $5b Canadian, and the US is paying $4b American. So the difference is less than 20 cents, but the difference is real.

The fact of the matter is that this small $1b cost is minor compared to the costs on the communities, families and businesses that are being destroyed by lack of resolution. In all negotiations you must be willing to give a little to get a little.

We got a lot more out of this deal, I view this pragmatically.

I think that is exactly how the Conservatives view the situation as well.

It is called compromise. The deal may still not go through. It may hit obstacles in one or both countries.

But if it does, I think you have to look at the situation pragmatically. The question being, is this deal better than no deal. Is it better to settle for a less than ideal compromise now or let the situation fester for several more years.

As L&OOC posted, I would like a little more information as well as hearing the views from affected industries.

[shoop]

I wonder how the Liberals would have fared in the election if they would have announced a similar deal to this one in the fall. More and more I am liking Harper's political instincts, and questioning Paul Martin's.

I think this deal will pass because the will is there to pass it. The only opposition in the U.S. appears to be from homebuilders. It will be a rougher time here, but my guess is that the opposition won't gain much traction in opposing it.

I think that is exactly how the Conservatives view the situation as well.

It is called compromise. The deal may still not go through. It may hit obstacles in one or both countries.

But if it does, I think you have to look at the situation pragmatically. The question being, is this deal better than no deal. Is it better to settle for a less than ideal compromise now or let the situation fester for several more years.

As L&OOC posted, I would like a little more information as well as hearing the views from affected industries.

[Riverwind]

It is called compromise. The deal may still not go through. It may hit obstacles in one or both countries.

The deal is not a compromise - the American industry got everything they ever asked for and our industry gets nothing other than some of the duties returned. This deal is a complete sell out. I am very surprised the premiers are supporting it.

My opinion of Harper has dropped a lot because of this - clearly he is not willing to stand up for Canadian interests. It was definitely not in Canada's interest to allow the US ignore NAFTA rulings.

[Kiraly]

Double Post

[Kiraly]

The deal is not a compromise - the American industry got everything they ever asked for and our industry gets nothing other than some of the duties returned. This deal is a complete sell out. I am very surprised the premiers are supporting it.

Can you be more specific? The Americans got everything they asked for and we only got "some" (read: most) of the duties back? In what way?

I'm waiting to hear from the provinces, specificially Campbell and the BC Liberals.

[August1991]

It is called compromise. The deal may still not go through. It may hit obstacles in one or both countries.

The deal is not a compromise - the American industry got everything they ever asked for and our industry gets nothing other than some of the duties returned. This deal is a complete sell out. I am very surprised the premiers are supporting it.

My opinion of Harper has dropped a lot because of this - clearly he is not willing to stand up for Canadian interests. It was definitely not in Canada's interest to allow the US ignore NAFTA rulings.

On the contrary, this is great deal for Canadian and US lumbermen. The only losers are US consumers.

Canadian lumbermen have been given the combination for the bank vault and instructions about how to turn off the alarm. Now, like greedy thieves, they are getting into a yelling match about how to divy up the loot. The Ontario government, speaking on behalf of Ontario lumbermen, is not happy that they only get 9% and wants 12%.

Watching this happen makes me want to wretch. It's enough to turn one into a Libertarian.

Incidentally, I think this is the third such agreement in 20 years. Another irony is watching Jack Layton arguing in favour of free trade.

[Riverwind]

Can you be more specific? The Americans got everything they asked for and we only got "some" (read: most) of the duties back? In what way?

The Americans wanted the Canadian share of the lumber market restricted to 33% - they got that. But on top of quotas they got additional tariffs levied on Canadian lumber if the price of lumber drops. If sounds like Harper just took the US proposal and signed it.

The $4 billion will help but it does not offset the punitive terms of the deal.

The duties have already been reduced significantly and would likely be reduced to zero after the NAFTA court challenges complete so it is difficult to see why anyone thinks the Canadian industry wins.

[Wilber]

Somewhat correct. My understanding is that we are asking for $5b Canadian, and the US is paying $4b American. So the difference is less than 20 cents, but the difference is real.

Hard to tell what the difference should be. Somehow you would have to use some sort of average exchange rate for the entire period the tariff was collected versus what it is when it is eventually paid back.

[shoop]

Canadians get to keep the current share of the market we have. It certainty on this file for seven years.

The Premiers of the three main softwood-producing Provinces are happy with it.

You do realize the pointlessness of fighting for a deal that was never going to materialize ... don't you?

Better to provide the families of works in the industry with some sort of assurances about their futures than leave them in continual fear of the unknown.

The Americans wanted the Canadian share of the lumber market restricted to 33% - they got that. But on top of quotas they got additional tariffs levied on Canadian lumber if the price of lumber drops. If sounds like Harper just took the US proposal an signed it.

The $4 billion will help but it does not offset the punitive terms of the deal.

[geoffrey]

Can you be more specific? The Americans got everything they asked for and we only got "some" (read: most) of the duties back? In what way?

The Americans wanted the Canadian share of the lumber market restricted to 33% - they got that. But on top of quotas they got additional tariffs levied on Canadian lumber if the price of lumber drops. If sounds like Harper just took the US proposal and signed it.

The $4 billion will help but it does not offset the punitive terms of the deal.

The duties have already been reduced significantly and would likely be reduced to zero after the NAFTA court challenges complete so it is difficult to see why anyone thinks the Canadian industry wins.

That's somewhat factually wrong Riverwind. The export taxes would be collected by Canada in case of a price drop in lumber, not by the US. There will be no further collection of duty or tariffs by the Yanks.

We have unfair subsidies... we should be happy the Americans will turn a blind eye to our extremely low stumpage costs. This a rare situation where a tariff is justified I believe, to level the playing field between the nations. If Ottawa isn't going to raise stumpage costs, the US has to raise the cost of Canadian companies in their market.

Either way. No more money is going south, all future tariffs/taxes/whatever will be collected in Canada. That's the big winning point if you ask me.

[Riverwind]

The Premiers of the three main softwood-producing Provinces are happy with it.

If BC, Ontario and Quebec are on board then they deal must be better than it sounds.

[August1991]

Riverwind, if we had free trade in lumber, our exports to the US market would increase the supply and this would depress US prices.

By negotiating these export quotas (agreeing to restrict Canadian exprts to 33% of the US market), Canadian lumbermen are now acting as a cartel and they will earn monopoly profits.

Normally, Canadian lumbermen would never be able to collude this way because individual members would cheat on any agreement. So, the Canadian and US governments are providing the enforcement to keep the cartel together. The only losers are US consumers who will have to pay more for new houses and doing renovations.

I agree that Canadian lumbermen would prefer to have more than 33% of the US market, but that percentage is better for them than free trade would be.

This is a standard, textbook international trade dispute and the proposed solution, a voluntary export restraint, is also plain vanilla. But it still makes me sick to see it happen.

[Canuck E Stan]

Just a note of interest about lumber prices.

When I was in Windsor Ontario, lumber that came from BC was cheaper to buy in Detroit than it was in Windsor.

So I wonder if it isn't the Canadian consumer who's getting

shafted and not the Americans(if it's still like it was a few years back)

Anybody ever do a comparision of Canadian and American prices for Canadian grown lumber?

[Riverwind]

By negotiating these export quotas (agreeing to restrict Canadian exprts to 33% of the US market), Canadian lumbermen are now acting as a cartel and they will earn monopoly profits.

I agree if the Canadian govt is allowed to simply give the tariffs collected back to the companies. If the deal prevents the govts from doing that then Canadian industry will lose more than they could possibly hope to gain with higher prices.

[Kiraly]

This about says it all for me.

B.C. supports amended softwood proposal, says premier

Snippet:

British Columbia has agreed to support an amended framework to negotiate a softwood lumber trade agreement with the United States, Premier Gordon Campbell says.

Campbell says the framework, which caps Canada's share of the lucrative U.S. lumber market and lifts onerous duties on Canadian softwood, is a reasonable deal for Canada and a good one for British Columbia.

British Columbia produces more than half of the softwood lumber exported to the United States.

The Government and the Opposition can spin their views til the earth stops rotating. The viewpoint I'm more interested in hearing is if the provinces and industry are on board.

[geoffrey]

The government always has the ability to distribute the taxes however they wish.

More subsidy over and above the current low stumpage costs aren't going to make the Americans happy.

We already have a major advantage in production, and the US just signed over 30-some percent of its market to us. How greedy can we be?

[Kiraly]

BC Lumber Trade Council Gives Conditional Support

The BC Lumber Trade Council has given conditional support to the framework agreement to resolve the Canada-U.S. softwood lumber dispute, pending a review of the final term sheet.

...

The BC Lumber Trade Council is the voice for companies in British Columbia representing the vast majority of BC lumber production. Its member companies account for about half of Canadian lumber production and half of Canadian lumber exports to the United States.

[August1991]

When I was in Windsor Ontario, lumber that came from BC was cheaper to buy in Detroit than it was in Windsor.

So I wonder if it isn't the Canadian consumer who's getting

shafted and not the Americans(if it's still like it was a few years back)

Anybody ever do a comparision of Canadian and American prices for Canadian grown lumber?

I suspect that local taxes and local conditions would explain the prices you saw. If Canadian prices were truly higher than US prices, there would be no trade dispute because Canadian lumbermen would be selling in the higher-priced Canadian market.

On balance (and ignoring any local charges), I suspect that Canadian lumber prices are lower than US lumber prices.

There is a trade barrier between the US and Canada and the barrier is like a dam. There is more lumber sloshing on the Canadian side than on the US side, and hence our lower prices.

[shoop]

Hmmm, without knowing the amount of tariffs that is a pretty big leap. Doesn't really make sense that the Canadian government would be allowed to give the tariffs back to the companies. What would be the point of having the tariffs in the first point?

I agree if the Canadian govt is allowed to simply give the tariffs collected back to the companies. If the deal prevents the govts from doing that then Canadian industry will lose more than they could possibly hope to gain with higher prices.