US. misses softwood deadline

The U.S. missed a deadline to resolve its softwood lumber dispute with Canada.
Is anyone surprised?

US. misses softwood deadline

Foot-dragging comes days after PM called for proof Washington respects NAFTA

The United States missed a key deadline yesterday for complying with a NAFTA ruling that should have dramatically cut duties in the bitter softwood dispute, denying Canada the gesture of good faith it's been requesting before it would resume talks to settle the conflict.

Yesterday's foot-dragging especially angered Ottawa because it was only on Monday that Prime Minister Paul Martin called on U.S. Secretary of State Condoleezza Rice to provide proof that Washington still respects the North American free-trade agreement.

Canadian-U.S. relations concerning the $8-billion softwood dispute have been in a downward spiral since August, when Washington spurned a different NAFTA ruling that should have ended the conflict.

In this separate case, a NAFTA panel of trade adjudicators has ruled five times -- most recently Oct. 5 -- that the United States's calculation of part of its softwood duties was illegal under U.S. law and it has five times urged Washington to bring its results into line.

NAFTA ruled five times that the US is wrong?
Does the US care?
If so how?

At 5 p.m. Eastern time, the U.S. government announced it had some questions about the panel's ruling and that softwood duties would stay in place. It requested "clarification" of the NAFTA decision and asked for more time to comply. Yesterday was the last possible day for Washington to respond to the NAFTA ruling.

After 5 rulings that the US is in violation of NAFTA, the US wants "clarification" at the 11th hour. What can possibly need to be clarified at this point?

"This seems to be another example of the lengths they will go to avoid offending, at least in the short term, special interest groups like the [U.S. Coalition for Fair Lumber Imports]," an official said.

"I hardly think this can be construed as the signal of good faith that the Canadian government was looking for," said Carl Grenier, executive vice-president of the Free Trade Lumber Council, which represents about 40 per cent of lumber exports to the U.S. market.

The B.C. Lumber Trade Council, representing half of U.S.-bound lumber exports, accused Washington of employing "delay tactics."

The U.S. government, which this week asked Canada to tone down its "apocalyptic language" on softwood, insisted it's playing fair.

"This administration is fully committed to NAFTA and to coming to a lasting agreement with Canada to resolve this dispute," Commerce Secretary Carlos Gutierrez said.

International Trade Minister Jim Peterson called on Washington to respond promptly. "It is up to the United States to show that the institution of the NAFTA means something," he said. "Rules are rules, you can't just pick and choose."

In a nutshell, that is the mistake that Canada and other keep making: The US has proven, time and time again that it can and will pick and choose the rules it will abide by. Waiting for Washington to respond promptly to trade disputes when the US is at fault has proven to be futile.

By now it should be point blank obvious that the word of the US (at least the word of this administration) is totally worthless. Therefore, it most assuredly is not up to the US "to show that the institution of the NAFTA means something". Rather it is up to everyone else to make it extremely painful for the US to not honor its trade agreements.

Hardball is the only thing this administration understands.
It is up to Canada to prove it is willing to play hardball.
That is the bottom line. No more, no less.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/