Overdue Penance


“This calls for a special penance,” says the priest. “Have you ever done a retreat?”

The man thinks about it for a moment and replies: “No, but if you can get the plans, I can get the lumber.”

The United States hasn’t exactly been filching lumber from the Canadians, but our government finally has confessed to an illicit tariff scheme and is about to perform a kind of penance for its trade sins: In a tentative agreement that promises to end a lengthy dispute over Canadian softwood lumber, our government will refund about $4 billion it has collected in duties, back to the Canadian companies that paid them.

This is welcome and long overdue news. The dispute has dragged on for four years, which is far too long–especially with a trade partner as important to us as Canada. Rob Portman, the U.S. Trade Representative, had said he was committed to resolving the controversy before assuming his new job in the Office of Management and Budget. His USTR deputy and likely successor, Susan Schwab, also played a key role in settling the matter.

The deal still has to be finalized. And, it’s still debatable whether it will deliver a boost to the building industry by lowering the cost of a key component for home construction. If this agreement does, it will mean that new houses may become more affordable for many Americans. Home ownership is a central part of the American dream, and anything that encourages it–especially when the encouragement involves eliminating a discouragement such as a trade-distorting tariff–deserves praise.

Free-trade purists will say the agreement isn’t perfect because it allows for punitive duties on lumber from the Great White North if prices drop to a certain level and the Canadians achieve what is deemed to be too much market share. The purists in fact will have a good point. But this is no time to let the perfect become the enemy of the good: What we have here is a deal that makes sense for now, and which is definitely an improvement over the status quo. Besides, the Canadian dollar is currently hitting a 28-year high relative to the U.S. dollar, making it that much more difficult to flood the American market with lower cost wood.

The deal comes on the heels of a decision by the World Trade Organization that said U.S. duties on Canadian softwood lumber violate international trade rules. Finalizing the agreement should fix this problem.

The result is of special interest to U.S. corn producers; because in recent months we’ve been locked in our own dispute over Canada’s imposing a special tax on grain corn of $1.65 per bushel. It was hypocritical for our country to demand an end to this bit of protectionism while maintaining our own unfair trade barriers on Canadian lumber. We were talking out of both sides of our mouth.

To the surprise of just about everyone, however, the Canadian International Trade Tribunal (CITT) removed the extra US corn tax last month. Most observers had thought it was about to be made permanent–and that trade ties between Canada and the United States were going to take a turn for the worse, to the detriment of citizens on both sides of the border.

But now things are looking up. Perhaps these warming relations owe something to the recent election of Stephen Harper as Canada’s new prime minister–it was said at the time of his victory earlier this year that he might enhance ties between our two countries.

Whatever the case, patching up our ties is the right thing to do, for them as well as for us.

Tim Burrack raises corn and soybeans in partnership with his brother on their NE Iowa family farm. Tim is a Board Member of Truth About Trade and Technology (www.truthabouttrade.org) a national grassroots advocacy group based in Des Moines, IA formed and led by farmers in support of freer trade and biotechnology.

Tim Burrack

Tim Burrack

Tim grows corn, seed corn, soybeans and produces pork. Has been very involved with Mississippi River lock improvements and has traveled to Brazil to research their river, rail and road infrastructure changes. Tim volunteers as a board member for the Global Farmer Network.

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