quote:
CLEVELAND—There's a real question emerging of whether NAFTA's dispute settlement process is worth the paper it is printed on, and if not, whether NAFTA itself has any real value.The reason for this, particularly among some people who campaigned for the North American Free Trade Agreement, is a growing belief that Americans view the process set out in NAFTA to resolve disputes as largely irrelevant. Canada's continuing frustration over the softwood lumber dispute is seen as the prime example.
The Canadian goal in free trade with the United States was to obtain a set of clear rules to resolve trade disputes. This, it was argued, would offset the ability of the United States to bully Canada because of its much greater power.
Canada failed to get what it really wanted — an exemption from U.S. anti-dumping and countervailing duty actions. The Mulroney government settled for a second-best solution. Under the agreement, when there is a dispute over a U.S. trade action against Canada, as in the softwood lumber case, a dispute panel of Canadians and Americans can be established to determine whether U.S. law has been properly applied. If the panel finds it has not, then the U.S. tribunal must correct its decision. This is set out in Chapter 19 of the FTA.
Since they launched their latest assault on the Canadian lumber industry in May 2001, the Americans have lost a series of panel reviews of their trade actions. But they have stubbornly refused to drop the penalties and return the more than $4 billion they have illegally collected from Canada.
The core American position is that they don't have to turn the money back to Canada, and if Canadians want the $4 billion back they will have to make concessions to the U.S. Even though they have lost their case, the Americans have to "win."
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posted 24 April 2005 05:35 PM
