Saturday, August 20, 2005
US Blows Away NAFTA
Ugh The US and Canadian trade agreements are basically free trade. However, recently, the US has put a tarrif on Canadian soft lumber, and collected $5B doing so. Canada has taken the issue to every single body established under NAFTA to mediate, and all of them have found in Canada's favor. Last week, they went to the trial of last resort: the Extraordinary Challenge Committee. No kidding. It was put into the treaty by the US, who wanted it there as a 'last resort' for trade disputes. And they found in Canada's favor. And so the US said: "Tough, we'll still collect the tarrif. You can't stop us." Really. So, now Canada is going to the WTO to ask permission to levy $5B in retaliatory tarrifs.
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2 comments:
Well, it looks like Bob's become a Canadian, caring about stuff like this.
For those of you keeping score at home, the reason this matters -- and I'll use small words -- is that it means the US is now ignoring the terms of NAFTA. NAFTA used to be the second largest free trade block in the world, behind the EU. Now, since the US is ignoring its regulatory bodies and Canada is about to retaliate with permission of the WTO, it's a worthless scrap of paper.
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