Posted on 01/27/2005 1:31:46 PM PST by Willie Green
For education and discussion only. Not for commercial use.
WASHINGTON - Frustrated by legal challenges and stalled talks, the U.S. lumber industry is threatening an unprecedented constitutional challenge of NAFTA that could risk unravelling the decade-old free trade deal completely.
The U.S. Coalition for Fair Lumber Imports yesterday confirmed statements by Sen. Michael Crapo of Idaho that it may file a lawsuit challenging the wide-ranging trade deal's authority over U.S. law.
"The grounds would be that it is inconsistent with the U.S. Constitution and it violates our rights," said Harry Clark, a lawyer for the coalition.
Trade experts said last night the constitutional challenge, if successful, could seriously undermine the free trade pact between Canada, Mexico and the United States.
The pact has been held up as a global model and spurred similar deals in Europe.
"If they win, it would cause a lot of heartburn, especially for Canada," said William Merkin, a Washington trade expert who was a U.S. negotiator during the original Canada-U.S. trade talks.
Sen. Crapo told the Senate during a rare debate on the Canadian softwood lumber dispute this week that the U.S. lumber industry intends to launch the constitutional challenge to a series of NAFTA panel rulings that appear to have gone in Canada's favour.
"The future of U.S. sawmills and millworkers cannot be allowed to be ruined by outlandish decision-making by NAFTA dispute panels and a panelist's service with an obvious undisclosed conflict of interest," he told the Senate.
The senator was referring to the U.S. industry's extraordinary challenge of a NAFTA panel ruling that essentially found that Canadian lumber exports did not hurt the U.S. industry. The coalition is complaining one of the five panelists has a conflict of interest. A ruling is expected as early as next month.
The U.S. lumber industry intends to argue that NAFTA's Chapter 19 is inconsistent with U.S. law. That chapter deals specifically with dumping and countervail laws.
Mr. Merkin said a successful challenge of Chapter 19 -- something that would take at least a year -- would open a "Pandora's box" for the three governments since they would likely end up trying to renegotiate much of the entire trade pact and fight old battles over again.
"All three sides would be looking to change parts of the deal that they don't see being in their interest," he said.
The three senators close to the dispute -- Mr. Crapo, Max Baucus from Montana and Larry Craig from Idaho -- warned the United States will not easily give up the US$3-billion in duties it has collected unless there is a settlement.
"The United States will be flexible about the form a lumber settlement may take," Mr. Baucus said, but he added that no matter what the final decision of next month's challenge, the case is far from over.
"The question of reform of NAFTA's Chapter 19 dispute settlement mechanism is an issue Congress will have to address," Mr. Baucus said. "It will be regrettable if these well-intended statement of fact and resolve is taken in Canada as hostile."
The comments come after the U.S. Commerce Department slightly revised lower its import duties on Canadian lumber, the second such move in past months. The duty now hovers about 21%, instead of the original 27%.
Ottawa welcomed the decision by the Commerce Department as more proof that the four major timber producing provinces -- British Columbia, Quebec, Ontario and Alberta -- do not illegally subsidize timber rights to gain market share in the United States.
"While this will not end the softwood lumber dispute overnight, it is proof that our message is being heard loud and clear south of border," said Jacqueline LaRocque, a spokeswoman for Jim Peterson, the Trade Minister.
"Canadian softwood lumber is not subsidized, and even the Department of Commerce has recognized this," said Ms. LaRocque.
She said the federal government continues to demand that all the duties collected during the past three years be returned.
"We are infinitely better off without treaties of commerce with any nation."
--Thomas Jefferson to James Madison, 1815.
ping
I would love it if NAFTA croaked.
One of Rush's few brain cramps!
One of Rush's few brain cramps!
Agreed and good luck to them.
bump
Save an owl! /sarcasm off.
I think it is not possible to challenge. Don't treaties become the law of the land. And just like the constitution, they can't be changed or modified by congress. Unless we repeal NAFTA is it really possible for the SC to overturn it?
Maybe I'm wrong, but I thought treaties were basically an extension of the constitution.
It is your constitutional right to not have to face trade competition?
By the way, your Thomas Jefferson quote totally contradicts your point. Jefferson didn't want treaties because he wanted trade to be free... he didn't see why we should restrict it, hence no need for treaties.
"I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make, be the difference of price what it may."
--Thomas Jefferson to B. S. Barton, 1815. ME 19:223
"The prohibiting duties we lay on all articles of foreign manufacture which prudence requires us to establish at home, with the patriotic determination of every good citizen to use no foreign article which can be made within ourselves without regard to difference of price, secures us against a relapse into foreign dependency."
--Thomas Jefferson to Jean Baptiste Say, 1815.
"I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make, be the difference of price what it may."
I stand corrected , perhaps he did become more of a protectionist as he got older. However that quote is pure economic insanity. What if it costs $100 to produce something in the US, but can be bought for $1 if it's imported. It is totally economically inefficient to buy from the US firm.
TRADE IS GOOD FOR THE ECONOMY. Individuals and Firms only make a trade when it is in their own economic best interests to do so, that is called capitalism, and capitalism is why we are living in times of unprecedented wealth.
Agree, trade is good for the economy. NAFTA may hurt some domestic industries but it helps others...it's just the way it is.
"NAFTA may hurt some domestic industries but it helps others"
From an economic standpoint, the industries geting hurt by it is also a good thing. We operate on a profit and loss sytem, whereby profitable enterprises are created and expanded, while loss-making relatively inefficient enterprises have to become more efficient, become smaller, or dissapear. If you only have the profit side of the system, we would be holding our economy back. Think about this fact... virtually all of the jobs that exist today didn't exist as they are 50 years ago. That means that some companies and jobs had to fail for new ones to arise.
We should drop all such NAFTA like treaties immediately -- and drop our tariffs and any quota systems to zero as well.
Why screw the US consumer?
If other countries want to tax their consumers through trade restrictions like Europe, let them.
Our model should be to beat Hong Kong as the free entrerprise country of the world. Most studies show that the greater the economic freedom of a country, the wealthier its citizens are.
The only requirements we should make on imported goods involve proper labeling of country of origin ("made in China by slave labor") and homeland security ( no e. coli in foods , no explosives, etc.).
There is no such thing as "a level playing field."
Hoppy
Not if they conflict with the Constitution.
I'd love to see NAFTA, GATT, and the WTO bite the dust.
Hope it happens. But...
TRADING DEMOCRACY
http://www.freerepublic.com/focus/fr/622674/posts
I'd love to see all the legislators who signed it, without reading it or researching the effects, croak.
You forgot the UN!
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