Should Canada retaliate for the U.S. and Japanese Tariffs and Bans?
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Roy Whyte
CDM
July 24, 2003
There has been some growing talk around the subject of retaliatory trade sanctions against those that have done the same in kind to Canada.
This issue is not something new as Canada and its trading partners have faced this dilemma many times before. Only this time it seems many more Canadians are pushing for a stronger stance from their politicians.
For as many that want to see retaliation, there are nearly as many that want to just stay the passive course and ride out what is dealt to us. Are these the voices of reason or appeasement?
The reasoning for the anti-retaliation crowd seems to lie with two main arguments – staying within NAFTA and that we would somehow be the losers in any trade war.
The pro-retaliation backers will quickly point out that softwood lumber and Canadian wheat most certainly fall under NAFTA and should NOT be subjected to duties and tariffs. This has not stopped the United States from slamming duties onto Canadian products and subsidizing to the hilt their own farm industries. The U.S. has lost multiple challenges through the WTO and NAFTA tribunals over the years yet, as we all know they have tried it once again.
So… if they are so ready to play hardball outside the framework of NAFTA, why shouldn’t Canada? With that we come back to the appeasers claim that Canada would lose any trade war with the U.S.
Any trade war with the U.S. or others could get messy if we simply play nice. With tens of thousands of Canadians out of work over softwood, playing nicely should not be in our vocabulary. Hardball should be the name of the game. We need to hit them where they will quickly notice. Energy – something America is a glutton over and we have plenty control over.
How long would any trade war last when N.Y. and California State are sitting in the dark? How many days would pass in this trade war when millions of American SUVs are sitting in their owner’s driveways with only fumes in their tanks? This Canadian does not hesitate to say – not long. Do Canadian politicians have the courage to stand up for their fellow Canadians and play hardball? That is the billion-dollar question.
When America floated the idea of hitting the European Union over steel they quickly made it known that they would retaliate in kind with just as harsh measures. Low and behold America lost the WTO challenge. So, were Canadian politicians taking notes?
Seems not – Federal Agriculture Minister Lyle Vanclief has made it clear that his government does not have the courage to stand up for their fellow Canadians. His excuse – Canada must remain within the realm of established trade deals.
Once again the spineless pussy willows in Ottawa would rather play the nice whipping boy than stand up for their fellow Canadians that are losing their very livelihood.
Just how much of an impact would looking at Canadian exports of energy to the U.S. make over this issue?
Canada is now the fifth largest energy exporter in the world. Some 31% of our exports in this field go directly to the United States making Canada their largest supplier. Canadian natural gas shipments to the U.S. accounts for a staggering 94% of their total yearly consumption. Also of note is that the United States thirst for oil has manifested itself into America importing almost 2 million barrels a day of oil from Canada.
Canada should take advantage of the leverage we so obviously have before it is too late. It is the one stick we carry over our more powerful neighbour to the south. That stick is very quickly being bought out from underneath us. In 2001 alone U.S. firms purchased over $35 billion in Canadian oil and natural gas assets!
Under NAFTA the “proportional sharing†segment guarantees to America that Canada will forgo any national hording, and guarantee America a ready supply even if ours dwindles. Even with that constraint, why should we play within the guidelines when they most certainly do not?
This debate is sure to heat up as the summer drags on and more and more Canadians and their communities suffer as a result of weak-kneed politicians. Only one question remains – how long until those that represent Canadians stand up and fight for them?
Roy Whyte is the Director of WhiteBark Innovations
and edits Canadian Software and Technical News
@ July 24, 2003