To date, over $5 Billion USD of extra tariffs have been levied against Canadian softwood lumber exports, despite repeated trade tribunals - including the last which was made up predominently of Americans - ruling in Canada's favour.
GW's response was to simply repeat his position that any settlement must be made under further negotiations. Canada's reaction is, understandably, "why do we have to negotiate when we won?"
So the sanctions continue, and the US lumber industry continues to fight the most recent setback by attempting to have NAFTA itself declared unconstitutional due to the nature of the section governing dispute settlement.
So, where does the oil come into this?
Well, a little-known fact is that NAFTA is also the governing document for all energy trade between it's members. These members, of course, include not just Canada and the US, but Mexico as well. In other words - two of the top three source countries for oil imports into the US.
NAFTA ensures that no extra duties are levied against energy trades between the member countries, and - more importantly - guarantees that the ratio exports to the US compared to total exports from Canada and Mexico remains constant. In other words, Canada and Mexico are BOUND to sell a good chunk of their oil to the US. This provides a stabilizing influence on the market to some extent, and certainly helps ensure a small measure of cost certainty to American consumers. And with the gulf region still under capacity after the huricanes, one would think that supply certainty would be a priority.
Not so it seems.
Should this lawsuit succeed, Canada and MExico will be free to market ALL of their oil to the highest bidder. Or they will be free to ensure their own supply certainty and nationalize their industries, or put export limits and remove ourselves from buying on the open market. This is, in the wake of recent price fluctuations, an idea that many Canadians might insist be considered should NAFTA dissapear. We produce more oil than we need. Why the hell should we pay inflted market prices for domestic consumption?
And as you consider the costs of rebuilding the Gulf Coast, bear in mind that some analysts have determined that the average cost to build a house will drop by nearly $1000 should the punitive duties on Canadian wood be removed. Do that math by the number of houses required, and ask yourself whether this tax does anything besides push equivalent costs onto the citizens of the US, especially as so much of the rebuilding will come out of the federal purse.
That is the total additional revenue recieved by the US on Canadian lumber during this trade spat.
How many days does it take before that is expended in Iraq?
And how does that stack up against a small measure of supply-side- and cost-certainty for oil in today's market?
You may just find out this winter.....
Canada doesn't WANT the type of ass-sucking that the House of Saud gets even if we do sell you more oil than them.
But we're a little tired of getting shat on too.