Wednesday, August 24, 2005

All too true

Duncan Cameron takes on NAFTA with both barrels:
To their everlasting discredit, Prime Minister Brian Mulroney, his principal advisers and his cabinet accepted a trade treaty which provided for a face-saving mechanism of bi-national panels to review domestic trade rulings, and claimed this was free trade. While Mulroney and his people claimed they had a free trade deal it was nothing of the sort. Free trade would bind the U.S. government to respect the free movement of Canadian goods into the U.S. Under NAFTA, like the FTA, the U.S. Congress is free to legislate trade restrictions, and U.S. trade tribunals are bound to respect the U.S. laws.

The NAFTA panels can review U.S. trade tribunal decisions. If the panel disagrees with the interpretation of U.S. law given by the U.S. trade tribunal, the NAFTA panel can send it back to the tribunal for review. That's it. The U.S. government can then change its laws to make them conform, not to the NAFTA panel decision, but to its original intent: i.e. to protect the U.S. producer from Canadian competition. That is what it has done in the past.

I disagree with Cameron on the question of whether the countries are too far out of balance for retaliation to work (particularly when the U.S. is actively making its economy weaker, but he's right in his analysis of how this calls all of NAFTA into question. Give it a look.

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