Our opinions and advice to the world. Updated whenever we get around to it.

I Just Don't See It Happening

It seems that after 4 years the Liberals have finally gotten their panties in a bunch over the Canada-US softwood lumber dispute:
The federal government hinted at an escalating trade war today as two senior cabinet ministers warned of potential tariffs on American exports in retaliation for U.S. policies on softwood lumber.

Trade Minister Jim Peterson is identifying areas where Canadian tariffs could put maximum pressure on the U.S. economy with minimal damage domestically, two of his cabinet colleagues said.
Now don't get me wrong, I think Canada should have a strong international trade policy. Unfortunately, slapping around the US Congress isn't going to accomplish anything. First of all, no members of the US Congress have any constituents in Canada. Second of all, I would bet you that they have plenty of constituents that could make a few quick bucks off of an Canada-US trade war. It's a non-starter I'm afraid.

I guess I find the entire softwood lumber dispute somewhat amusing because of the fierce emotions Canadians bring to the fight. Sure the US is shafting us regarding softwood lumber but considering the amount of goods and services that cross our border everyday, the trade relationship between us is undoubtably the best between any two countries in the world.

Another thought that should be considered is that with any type of representative government legislators are going to pull a few cheap shots now and again for political gain. In short, if you want to avoid any surprises regarding or international trade relations I'd suggest that we start trading exclusively with Cuba and North Korea.


Anonymous said...

You are right. Of course the problem is the relative size of the economies of the 2 countries. Unless Canada is the only supplier of a major US need and Canada has other customers for the product, nothing can be done to threaten the US economy. Canada's only options are to enforce trade aggreeements in the courts or appeal to American spirit of fair play. When it comes to profit American sense of fair play is rather numb. Of course in 10 to 50 years USA will feel the same way about China. China's and India's economy are going to be massive. They will probably account for at least 1/2 of the worlds buisness. The American economic clout will diminish in relation to theirs. Of course Canada's economy will also diminish in relative terms. The only good(?) will be that USA will no longer be our major trading partner and Canada will diversify its foreign trade.

Dana said...

I'm not to sure about China's and India's future economic clout. China has to many internal contradictions for it's growth to remain as high as it currently is.

India I have more confidence in but I still have my doubts.

The other point I think worth making is that no matter who the great economic power of the future is, as long as the US remains in it's present form (i.e. the country doesn't split up) they will always be our largest trading partner. Sheer size and geography guarrantee that.