Softwood Lumber Dispute Exposes the Myth of "Free Trade"

With the Canada-U.S. softwood lumber agreement expiring on April 1, U.S. lumber companies are lobbying hard for punitive tarriffs to be levied against Canadian softwood lumber products. The previous agreement imposed tarriffs on Canadian softwood lumber, despite the fact that U.S. claims of unfair subsidies were rejected by the courts on the basis of U.S. trade law. It is generally acknowledged that the U.S. companies are simply using the economic might of the United States to block competing products from entering the American market.

This is precisely the kind of problem it was claimed that NAFTA was designed to prevent. But the softwood lumber dispute, as well as numerous examples of the blocking of Canadian agricultural exports to the U.S., demonstrates that "free trade" is not, and never was, the aim of NAFTA. Rather, the aim of NAFTA was simply to guarantee the U.S. access to Canadian and Mexican markets and resources at prices dictated by the U.S. market. However, when it is in the interest of various U.S. multinationals to block Canadian and Mexican access to their markets, they use the power of the U.S. state and economy to impose their restrictions, regardless of the conditions contained within NAFTA. In other words, when NAFTA serves U.S. economic interests the U.S. government upholds its terms; when those terms are in conflict with U.S. economic interests, there is de facto abrogation of NAFTA by the U.S. government.

Recently, an American businessman and former CEO of McMillan-Bloedel advised a group of British Columbia lumber barons that Canada should respond to the U.S. measures against Canadian softwood lumber by threatening to cut off exports of Canadian electricity to the U.S.. Canada supplies the U.S. with one-third of its energy imports. The advice won strong verbal support from the lumber barons, but was received less than enthusiastically by the Canadian government and the power companies that are reaping windfall profits from the export of electricity to the U.S.. As the deadline nears, disagreements are also emerging within the lumber industry, with some companies demanding that the Canadian government stand up to the U.S., while others, fearful of losing short-term profits, are advocating capitulation.