Posted on 10/11/2005 1:17:48 PM PDT by proud_yank
Ottawa pushes to sell energy, wood to China
By MICHAEL DEN TANDT
Tuesday, October 11, 2005 P
OTTAWA — Less than a week after Prime Minister Paul Martin publicly raised the spectre of energy restrictions as a lever in the Canada-U.S. softwood lumber dispute, the federal government is launching an aggressive push to sell energy and wood to China.
"Now is the time to diversify Canada's trade and investment relations, especially in China, and especially in energy and other natural resources," Revenue Minister John McCallum said.
Mr. McCallum, who became acting Natural Resources Minister last month after John Efford stepped aside because of health concerns, is travelling to Beijing today in advance of the G-20 summit, for talks with senior Chinese officials.
The timing of the trip, so soon after Mr. Martin's toughly worded speech to a New York audience, is no coincidence and is partly intended to reinforce Mr. Martin's message, sources say.
"This is not a threat, and there is no linkage," Mr. McCallum said in an interview yesterday. "I am saying that Canada is pursuing its national interest to sell our energy resources and our other resources all around the world to get the best price and the most secure markets that we can."
But like Mr. Martin and other senior government officials who addressed the issue over the weekend, Mr. McCallum, while insisting there is no linkage between softwood and energy, explicitly reiterated the link.
"The government is saying that if the U.S. doesn't respect NAFTA rules on wood, then what does that mean for NAFTA rules in other areas, including energy?" Mr. McCallum said. "Canada believes that NAFTA is too important for both of our countries to sow doubts like this in people's minds."
Under the Bush administration, the United States has officially re-classified China as a "strategic competitor." In conservative circles in Washington, China is increasingly viewed as the United States' next great economic and military rival.
With well over a billion people, annual economic growth upwards of nine per cent and foreign exchange reserves of $711-billion, second only to Japan, China has enormous purchasing power.
The country also has extraordinary and growing needs for energy. According to the International Energy Agency, Chinese demand for crude has doubled in the past decade, to 6.75 million barrels a day.
Chinese efforts to obtain energy assets in the United States, such as an abortive attempt to acquire Unocal, the 9th-largest U.S. oil company, have met strong political resistance.
Mr. McCallum, asked whether the Canadian government has any concerns about how his foray to Beijing might be perceived in Washington, said that whatever the U.S. view of China may be, "Canada's policy is that we have a strategic partnership with China."
Last month, a NAFTA panel ruled that U.S. tariffs on softwood lumber, which have cost the Canadian lumber industry $5-billion in the past five years, are illegal under U.S. trade law. The U.S. government has ignored the ruling, even though, under NAFTA, the panel that made the ruling is supposed to be the final arbiter of any dispute.
In his speech in New York last week, Mr. Martin called this "nonsense," and pointedly suggested that Canada could take its energy and other natural resources to other customers, including India and China.
On CTV's Question Period on Sunday, Conservative MP Rona Ambrose dismissed the Prime Minister's threat, saying the federal government lacks the wherewithal to back it up. "Paul Martin doesn't have the power to tell private companies who they can and cannot sell energy to," she said. "So that in itself is disingenuous. . . . I think he needs to sit down with President Bush or pick up the phone and talk to him and have an honest conversation about the impact on jobs in Canada and on our industry."
Mr. McCallum countered yesterday that political goodwill can be essential in the early stages of a bilateral commercial relationship. "The federal government cannot do this alone, but particularly in the case of China, government-to-government relations are crucial."
Last month, amid little fanfare, the Prime Minister and Chinese President Hu Jintao officially elevated Canada's relationship to a "strategic partnership." That puts Canada in a category that includes the Association of Southeast Asian Nations, Russia, India, Brazil and the European Union.
At the same time, the Liberal government, with provincial governments in Alberta and British Columbia, is working to upgrade port, road, rail and pipelines to accommodate more traffic from Asia.
Latest Comments in the Conversation
Marshal Cheung from Toronto, Canada writes:
I wonder why this web site allows every one to read this article but requires subscription to another article Talking tough to U.S. is popular, until it costs you a job? I do not have access to the second article which spells a different opinion, but I do agree that the government is playing a dangerous game. The Canada people really need a leader with long term vision instead of just talking and doing nothing. As far as I know there are plenty wood supply from Russia and South Asia, what is the meaning for China to buy and transport long way from Canada? Canada should not live on resources. As transportation improves, the resources will just get cheaper and cheaper. The most important is to develop the technology and skills instead of selling raw materials. To achieve this we need a strong market. It is buyer's economy in a global economy.
Posted Oct. 11, 2005 at 2:40 PM EDT Link to Comment helen tung from Toronto, Canada writes:
Dear CAPT America in the United States of America, Thanks for the NAFTA data. You need to review what your country has benefited from Canada since NAFTA was conceived. As for trading with Communist countries, it is my understanding the United States of America trades with Communist countries, to wit: People's Republic of China, and other countries controlled by tyrants throughout the world. So, think before you shout. Don't worry, the United States will always have a special place in our hearts.
Posted Oct. 11, 2005 at 2:44 PM EDT Link to Comment David Marshall from Peterborough, Canada writes:
I notice no specifics when the term "energy" as an export is used. What are they talking about? Coal, oil or nuclear reactor know-how? Selling hydro-electric energy to the states is feasible due to their closeness but cannot be "exported" to China".
Posted Oct. 11, 2005 at 2:57 PM EDT Link to Comment JH Lapointe from Montreal, Canada writes:
To pretend that USA is no better than China in the human rights category discredits someone from participating in any political conversation.China has killed and continues to kill millions, should I repeat, millions, of its own citizens for cases of non-conformity with the ideological guidelines of the communist regime.
The US has championned the human rights issues for decades and the fact that some of their recent actions raise some concern does not warrant such Carolyn Parrish leftist rhetoric. People force the border to get in the US - quite not the contrary. Perhaps human rights are better than in China south of our border.
As for trade with China, my problem is that any trade done with this country is an act of support to the communist regime there, and thus dooms the hundreds of millions of Chinese living in misery under this evil regime.Now, of course, China allows us to see images from its happy-looking cities, so it can be pretended as a good move from western countries leaders to announce trades and accords with China.
Posted Oct. 11, 2005 at 3:04 PM EDT Link to Comment Rick McCaffrey from Calgary, Canada writes:
Dear Ontarians Mike Edward and MS. It's facinating listening to your wonderful ideas on trade. There is a problem with this conversation however. Natural resources are under provincial control and I wasn't aware of anything other than two or three liittle gas wells pumping in Ontario. Do you really think China India the United States or anyone for that matter cares what Ontario thinks about Alberta, Sask, Man. and Labrador's resources ? I know in Alberta we don't. Ontario seems to be masters of the Canadian constitution, it seems it's time for a re-read out east. Please, for good of the country, mind your own business.
Well, whoever didn't see this coming, raise your hand?
I'm damn upset with America about the softwood lumber dispute, but this is ridiculous. You do not turn around and sell to the enemy. Sell to Europe briefly if it's such a big deal. China is the #1 worst choice to sell oil and wood to at the moment. My fellow Canadians, we should be afraid. Very afraid. This does not bode well.
And we should recognize Taiwan already.
Why exactly do we have these unnecessary timber restrictions anyway?
Go ahead, Canada. Please sell your oil to China. Maybe we - America - will finally face this so called energy shortage for what it is - politics at its worse - and start to become more self reliant. The envirotwits can go pound sand as we drill where we know we have oil reserves. And, by the way Canada, take the rest of your trade to China too.
Same thing, I doubt the europeans will buy ALL of the canadian wood stocks. If Canada where to sell everything to the europeans and dependent on them, Then they will have massive leverage over them. One must diversify their sales to avoid future conflicts.
You're upset about finished lumber...
What about raw logs...there are more raw logs going to sawmills in the US then finished lumber crossing the border...
Well this announcement is no surprise, I've comment probably for more than a year now on the Chinese investing in Alberta petrochemical/tarsands, and the scouting of Uranium in Saskatchewan, and their interest in CANDU Nuclear Reactors...
Sending lumber or raw logs to China is rediculous, since they can get it as Marshal Cheung from Toronto, Canada wrote:
"As far as I know there are plenty wood supply from Russia and South Asia, what is the meaning for China to buy and transport long way from Canada?"
The so called leaders in Ottawa need to pull their "crânes" out of their "trous d'âne"...
Since 'land resources' are a provincal matter, Martin has no say in energy sales to other countries. But then again, he is an idiot..sorry...liberal.
True, Petey. I don't truly grudge America the oil, either. I just wish America would abide by NAFTA. If you sign your name to something, that means you should keep your word and do what you promised to do. Integrity is a critically important part of character, both individual and national.
At the same time, I wish Canada would wake up and help out America more. Heaven knows they are our most important trading partners, our military protectors, many citizens have family there, and they make Canada a better place to live. If they need troops sent once in a while, we should be there. Instead, there's just anti-American vitriol, which is ridiculous.
And, you are right, we should diversify our trading partners. It's good for a large number of reasons. Oh well. Guess we are set on learning lessons the hard way...
The enemy? Do you buy from Walmart? Buying or selling. Makes no difference.
It's just wood. They'll probably build a few more homes with it. Of course, if you drop a pallet of 2x4's from an airplane, it can cause alot of damage to the targets down below.
I don't know but I'm guessing since Nafta was passed. We'd be smart to simply call it a wash and eliminate the duties, but who said we were smart?
I don't, actually.
If anyone can answer that, please let me know!
Neither . Since 2002 ,
Address by the Hon. Stephen Harper, P.C., M.P.
Leader of the Conservative Party of Canada
Leader of the Official Opposition
HALIFAX
Wednesday September 7, 2005
Before and since the 1980s, the United States’ lumber industry has been complaining that low stumpage rates for Canadian lumber constitute an unfair subsidy. But case after case, before GATT, the WTO, and NAFTA have found in the end that Canada is not illegally subsidizing its forest industry, and will find so again.
Yet Canada’s strong legal case has not prevented the US from imposing countervailing duties and anti-dumping duties. In 2002, 27% duties were imposed on all softwood crossing the border. Although reduced slightly to 21% in 2004, $5 billion in duties have now been collected from Canadian mills.
Let me be as clear as I can. The NAFTA panel process is supposed to be binding. It is supposed to trump domestic American politics. The danger of a failure to uphold this decision goes far beyond the impact it will have on towns dependent on the lumber industry in British Columbia,Quebec, Ontario, Nova Scotia or anywhere else.
If U.S. industry is able to pressure the government not to return duties when it has lost its last NAFTA appeal, it does not matter if most trade is dispute-free. If the rules are simply ignored, then the very basis of a rules-based trading system threatens to come unraveled, and the future of all Canadian-American trade relations could be profoundly affected.
http://www.conservative.ca/EN/speeches/address_to_conservative_national_caucus/
Softwood was left out and on the table.
There would have been no FTA if softwood was in, because of the way timber is licensed in Canada.
The Softwood Lumber Agreement was signed in 1995.
It expired in 2001.
Canada could have extended the 1995 agreement, but decided to renegotiate.
The current dispute is for money collected from 2002.
Canada left the table in 2002 and went to the dispute resolution mechanism, which is also still subject to some dispute and litigation in the USA.
The best place to solve this is at the table, but Ottawa will not sit down.
The Liberals have fashioned softwood into a political bat.
They can try and sell lumber to China all they want, but the market for softwood that is being fought over is the American market.
That is where the demand is and all the rhetoric in the world can not make a market.
Canada has done very, very well under the FTA.
The bickering between Canada and the United States over softwood lumber is like a case of sibling rivalry. It dates back hundreds of years. Even within Canada there are divisions. The B.C. Lumber Trade Council has argued a trade war with the Americans over softwood lumber would be costly and should be avoided by accommodating U.S. demands. The Free Trade Lumber Council, which includes lumber producers in Quebec and Ontario, wants to fight it out. What most Canadian foresters and governments do agree on is their goal: free trade in softwood lumber.
As stated, it seems Ontario and Quebec want this fight, while BC forest communities get the shaft, again.
PM Martin is hoping to polish his image in BC with promises of wealth from China.
Interesting! Thanks for the insight, hard to get a good picture of what is happening, and why, from the media.
Well, we already know the US does not live up to the trade agreements it has already signed. Why bother going back to the table, agree to concesions that we shouldn't have to make, and then probably have the US ignore the new agreements, anwyay?
And the US has done pretty good under the FTA, also. I can't tell you how many Canadian subsidiaries that used to exist due to tariffs disappeared with the FTA, along with the jobs they produced, to be consolidated in the US. Heck, even Clamato juice, a Canadian specialty and essential agreement of the bloody Caesar, is now produced in the US. Don't get me wrong, I'm not saying we didn't benefit from the FTA, but we also lost a lot.
So maybe BC and Alberta should raise their stumpage fees to be comparable to what is charged in central Canada. Why should central and eastern Canadian lumber producers be punished with duties based on the very low stumpage fees in BC and Alberta? Two sides to every story, ya know.
The citizens are reaping what the globalists have sown for America by forcing us into WTO regulated "free trade".
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