Lumber Dispute Strains Relations For U.S., Canada

"It's fair to say for me and the other architects ... of the free trade agreement, if we had not thought the rules were going to be there to resolve disputes and be respected, we would have been very reluctant to enter the relationship," McKenna said Monday during a conference of eastern premiers and New England governors in St. John's. Washington announced earlier this month it will ignore a ruling by an independent NAFTA panel and continue to apply punishing U.S. tariffs to Canadian lumber shipped over the border. McKenna, a former New Brunswick premier and one of the signatories of the deal, said one panel after another has ruled in Canada's favor on the issue. "You can't have it both ways," he said. "You can't carry out your appeal all the way to conclusion and then say when you lose, 'well, that doesn't count.'" American duties on Canadian lumber have climbed to $5 billion and continue to be applied despite repeated Canadian victories before trade tribunals that have ruled against U.S. claims that Canada unfairly subsidizes its forestry sector. There has been talk of retaliatory tariffs on such U.S. exports to Canada as California wine and Florida orange juice. Quebec Premier Jean Charest said the issue is "contaminating the relationship between the two countries." "It puts us in a position where we ask ourselves whether NAFTA is as important to our American neighbors as it is to us," Charest said. Despite the tensions, both McKenna and David Wilkins, the U.S. ambassador to Canada, who also addressed the conference, said free trade has served both countries well. Wilkins urged both sides to tone down the rhetoric and get back to the negotiating table. http://www.theworldlink.com/articles/2005/08/31/news/news16.prt

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