Bush 'Slush Fund,' Courtesy Of Canada

Honorable members, responsibility for this deal ultimately resides with the government and with you, not the industry. It has been forced on the industry for political reasons. No one in the industry likes it, but many believe they have no choice and, therefore, many have already accepted it. I want to talk for a few minutes about the genesis of this agreement and one of its most important and least discussed elements. There is a bit of Watergate in this story and, as in Watergate, it is essential to follow the money. Back before Christmas, David Emerson, then minister in a Liberal government, and his ambassador in Washington, Frank McKenna, were asking what it would cost to buy peace in softwood lumber. They were adhering to all of the usual Canadian negotiating positions on this subject: protecting Chapter 19 in NAFTA, fending off onerous anti-circumvention clauses, protecting Canadian prerogatives. But, unlike any previous dispute, this one involved the accumulation of over 4 billion, now 5 billion, dollars. And there was the Byrd Amendment, which led the U.S. industry to believe that if it could just stall long enough to wear down the Canadians, while claiming title to all of the money, they could settle for a lot of it. They knew the Canadians had brought a case in U.S. courts that could prohibit them from claiming any of the money pursuant to the Byrd Amendment. They demanded a 60/40 split back at Christmas. Messieurs Emerson and McKenna negotiated to 50/50 and then asked industry. Industry calculated net present value against litigation prospects, and said "no." But, in the process, Messieurs McKenna and Emerson asked what would be enough. At that time, under those circumstances, they were told 70 per cent. Think, then of how impressed Mr. Emerson was with himself when in April, he could tell industry that he got 80 per cent. But, there were at least four huge problems, and he had neglected all of them. First, on April 7, the United States Court of International Trade ruled that the U.S. industry was entitled legally to no money. None of it. It was not surprising then, that 20 days later, the U.S. coalition said that it would take $500 million. It was hardly a negotiating triumph to persuade them to take $500 million, when they had become legally entitled to not a penny. View full article and comments here http://thetyee.ca/Views/2006/08/29/SlushFund/ [Proofreader's note: this article was edited for spelling and typos on August 30, 2006]

Note: http://thetyee.ca/Views...