NAFTA and Softwood Lumber Chapter XIX

Stacks of lumber are pictured at NMV Lumber in Merritt, B.C., Tuesday, May 2, 2017.

JONATHAN HAYWARD/THE CANADIAN PRESS

Canada’s decision to turn to the North American Free Trade Agreement for a solution to the latest softwood lumber dispute proves how critical the agreement’s dispute resolution mechanisms are to this country, a Canadian international trade expert said Wednesday.

Canada on Tuesday asked a review panel under Chapter 19 of NAFTA to investigate the countervailing duties imposed on Canadian softwood imports into the United States.

The U.S. argues Canada unfairly subsidizes its lumber industry, and the question for the panel will be whether the duties are legal under U.S. laws.

This is the fifth Canada-U.S. softwood lumber dispute since 1982, and the third in which Canada has sought relief under the dispute mechanisms of free trade agreements with the U.S. They have largely ruled in Canada’s favour in the past.

Colin Robertson, a former Canadian trade diplomat, said Wednesday it’s no surprise Canada made the application despite political battles with the U.S. over the very existence of the Chapter 19 dispute mechanism.

“It would not be logical for us not to use it and we had to use it within a certain time frame so of course we’re going to apply it,” said Robertson.

Chapter 19 of NAFTA means Canada can get a panel made up of U.S. and Canadian trade experts to decide if the duties follow U.S. trade law, rather than going to the U.S. court system.

Robertson said trade agreements were pursued by Canada in the first place largely to create a dispute settlement mechanism “to give us some relief from unfair application – and I stress unfair – of American trade law.”

“In a psychological fashion from a Canadian perspective (this) kind of underlines why Chapter 19 is essential,” he said.

However U.S. President Donald Trump wants Chapter 19 eliminated, and he has support from many U.S. industries who feel it is unconstitutional and that the American courts are best equipped to determine whether U.S. law is being upheld.

The Canadian government has indicated eliminating Chapter 19 is a non-starter.

Robertson said the negotiations on NAFTA are largely parallel to this particular dispute, and Canada and the U.S. almost certainly knew when the last softwood agreement expired in 2015, that we’d end up back at Chapter 19 eventually.

In the past, NAFTA panels have told the U.S. its laws did not allow it to determine whether Canada’s pricing system for wood was fair using U.S. market prices, or that if there was a subsidy at play it was never as big as what the Americans tried to suggest with their duties. In 2005, a NAFTA panel unanimously agreed the U.S. industry had not been injured by Canada’s stumpage fee system.

Canada would hope to have similar findings again.

NAFTA rules require a panel decision on this complaint be made no later than the end of September 2018.

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Why Halifax International Security Forum matters

What to expect from the 2017 Halifax International Security Forum

Participants will talk North Korean nuclear weapons and women in international security


Defence Minister Harjit Singh Sajjan at last year’s Halifax International Security Forum.   Katie Short

Participants from 91 democratic countries are in Halifax this weekend for the Halifax International Security Forum (HISF).

From Friday to Sunday 300 people will gather at the Westin Nova Scotian, including prominent politicians, military officials, business leaders, journalists, academics and NGO workers from around the world. Canadian Defence Minister Harjit Sajjan will host the event.

Robin Shepherd, the senior adviser for HISF, said this year’s main discussion topics will be ISIS, Russia, the NATO alliance, North Korean nuclear arms and women in international security.

“This is a sort of conference that has a set of core values that we believe in, you know, liberal democracy, and that certainly does make it different from other conferences,” he said.

Attendees participate in on-the-record panels as well as smaller, off-the-record talks, which Shepherd says allows for more frank and productive dialogue.

“You can be sick to death of conferences and summits where diplomats just give the official line,” said Shepherd, who previously worked as the Moscow bureau chief for The Times of London. “It’s really refreshing to have the opportunity to really delve deep into issues and try to shift the terms of debate.”

Shepherd will moderate sessions featuring the Secretary General of NATO, the chief executive of the Islamic Republic of Afghanistan, and the executive chairman of Alphabet Inc., Google’s parent company.

‘All about jaw-jaw’

Since 2009, the forum has seen more than 300 participants from 91 democratic countries and their international delegations come to Halifax. Canadian Defence Minister Harjit Sajjan travelled to Nova Scotia to host this year’s event.

Since it began in 2009, the conference has hosted a number of high-profile keynote speakers. Last year, U.S. Senator John McCain was tipped off about a dossier that contained potentially incriminating links between president-elect Donald Trump and the Russian government.

Colin Robertson is a former Canadian diplomat and current vice president of the Canadian Global Affairs Institute—he has attended HISF multiple times and will again this year. He said the forum is about conflict prevention.

“I do think it’s something Canada has done that really makes a difference,” said Robertson. “As Churchill said, ‘it’s always better to jaw-jaw than war-war, and this is all about jaw-jaw.’”

Robertson suggests the big draw is access to other participants. He said the formal plenary sessions are interesting, but “almost incidental” to smaller bilateral meetings. In groups of 15-20, participants leave the Westin on Saturday night for dinners at restaurants around Halifax, he said. Those talks are off-the-record.

‘Not some innocent confab’

Allan Bezanson, spokesperson and organizer for the local activism group No Harbour for War, opposes what Bezanson calls “militarist solutions” to international security issues. The group is planning an “anti-war rally” for Saturday afternoon.

Bezanson does agree with Robertson on one point—participants come to HISF to talk to each other, informally.

“The important thing about these conferences is it gets these people together so they can mingle in the hallways and in the hospitality suites, and all that, and work out their plans,” said Bezanson.

While both Robertson and Shepherd point to this mingling as a productive and convivial feature of the forum, Bezanson considers it suspect.

“It’s not some innocent confab; it’s very serious,” he said.


The HISF is held at the Westin Nova Scotian in downtown Halifax.   Cory Funk

Public and private sponsors

HISF was created in 2009 with funding from the Canadian government and the German Marshall Fund, a Washington, D.C.-based non-profit. The event was initially the “vision” of former Canadian defence minister and Nova Scotia MP, Peter MacKay, according to a 2015 media release.

In a phone interview, MacKay said he and HISF president Peter Van Praagh wanted to replicate similar forums from around the world.

“Among my various travels I had attended security forums in places like Munich and Brussels and Estonia and the Baltics, and these big international gatherings to me seemed like a very good forum to have discussions,” he said.

The Canadian government was a sponsor from the beginning, but MacKay wanted HISF to move away from that funding model.

“The intention was always that it would become completely independent of government funding, and more arms length,” he said.

According to their website, HISF became an independent non-profit organization in 2011. Today, it receives funding from public and private sponsors, including the Canadian Department of National Defence and Air Canada.

The forum is paid for by a public-private partnership, including the Atlantic Canada Opportunities Agency (ACOA) and the Department of National Defence. The defence department allotted $3.3 million for this year’s forum, while ACOA contributed $250,000.

Halifax impact

Former Canadian defence minister Peter MacKay said it’s a boon for the community of Halifax.

“People who probably wouldn’t be coming to this city otherwise, you have a weekend where the hotel is full, taxi cabs are being used, restaurants are being used,” he said in an interview Friday. 

Glenn Bowie, area director of sales and marketing at the Westin, agreed with MacKay that the security forum has an impact on the local economy.

He said last year rooms were booked at 12 different hotels for the weekend. This year, 20 private planes refuel at Halifax Stanfield International Airport, pilots and crew book hotel rooms for the weekend, tables are reserved at 21 restaurants and more than 20 vehicles are chartered for moving delegates from one place to the next.

“It’s so good for our city and a lot of (other) cities would love to have it,” said Bowie.

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