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October 10, 2005

The U.S. Welshes on Its NAFTA Obligations

The U.S. Welshes on Its NAFTA obligations:

TheStar.com - Martin pushes back : Prime Minister Paul Martin struck just the right notes with American business leaders this week, in a forceful but restrained speech arguing that Washington's refusal to play by the rules on softwood lumber is a "breach of faith" between partners.

While Martin drew bigger headlines in Canada than in the U.S., the Wall Street Journal, CNN and news agencies all carried his complaint that Washington has damaged free trade by hammering us with $5 billion in unfair tariffs. With a Canadian federal election no doubt in mind, Martin vowed to continue pressing our case in the U.S. courts, Congress, the White House and with business and the public. The tariffs will cost the U.S. 25 jobs in industries that depend on cheap Canadian wood for every job they save in the U.S. lumber industry. Tariffs also have depressed home ownership by driving up building costs.

The PM raised eyebrows by reminding Americans that Canada is their closest and safest major energy supplier. Some saw in that an implicit threat to sell energy preferentially to rising giants like China and India, if the U.S. cannot bother to play fair. But Martin's real cautionary message was linked to the mad cow scare. U.S. ranchers kept the border closed needlessly, he noted. That forced us to ramp up our domestic processing capacity, instead of shipping beef south. That hurt U.S. processors. It also forced us to compete with the U.S. for sales in China, Japan and Korea. That can't help U.S. exports. Martin's message was thoughtful, and appropriately blunt. When the U.S. cheats on trade, it cheats its own consumers and workers. It's all bad.

The Bush administration: worse than you can imagine.

Posted by DeLong at October 10, 2005 07:19 PM