Monday, August 29, 2005

See you in court

For those hoping to see Canada take the issue of softwood lumber to court in the U.S., you've got your wish:
In a lawsuit filed in New York with the U.S. International Trade Court, Ottawa and the Canadian softwood lumber industry are demanding that ''tens of millions of dollars'' in import duties already funnelled to U.S. industries be handed back immediately.

That could easily soar to more than $5-billion in duties collected from Canadian lumber producers being illegally handed over to the U.S. softwood lumber industry in coming years, the Canadian complaint said...

The Canadian lawsuit says that even under American law, the so-called Byrd Amendment -- which diverts punitive import duties from foreign importers to allegedly suffering American industries -- does not apply to Canadian industries because of NAFTA.

There's some merit to the move, though it's not apparent why it would just be starting now; there's no reason why this particular suit couldn't have been launched from the moment money was handed over under the Byrd Amendment.

That said, there may be some downside to this now, both in opportunity cost and in the risk of a negative decision.

On opportunity cost, the article rightly suggests that we won't know for quite some time how long the case would take to get before a judge. But it's easy to guess that it would take at least months, and perhaps years if the U.S. decides to obstruct the process. This may thus be another chance for the U.S. to defer its obligations without immediate consequence.

On the merits, an American court will naturally be expected to see the issue on the terms most favourable to the United States. While courts in most countries would be very likely to recognize the supremacy of international agreements, that may not be so in the U.S., where Republicans have been threatening to impeach judges for applying international law, and where Bushco has been going around for years arguing that current presidential decrees trump the U.S. Constitution. In that environment, can we be the least bit confident that the decision to ratify NAFTA will be given precedence over more recent protectionism?

So, the process will be long (if nothing else, long enough to push it past the next Canadian election to make it seem that the Liberals are taking meaningful action), and it may give the U.S. another domestic precedent to wield against the NAFTA and WTO tribunals.

With that in mind, the real merit in launching the suit is purely symbolic - it's Martin's way of taking some action alongside the heated words of the last week. Which is well enough as a signal, but there's a lot more yet that needs to be done.

No comments:

Post a Comment

Post a Comment