Last week I travelled to Washington D.C. with the House of Commons Standing Committee on International Trade.
We made the trip for the obvious reason—the United States is by far Canada’s biggest trading partner in both exports and imports, and it is very much in our interest to both remind American legislators of Canada’s concerns and to find out what their concerns are.
Our countries have always been closely linked by this strong trade relationship, but recent world events, such as the Russian invasion of Ukraine and the increasing dominance of China in new technologies, have emphasized the need to strengthen it even further to lower our reliance on less reliable partners.
During our visit, we spoke to a number of congressmen and organizations directly linked to Canadian trade, such as the Alliance for Automotive Innovation, the National Association of Manufacturers and the National Association of Home Builders. We also met with officials with the U.S. Trade Representative office, which negotiates trade agreements through the White House executive branch.
That relationship has been strained by a number of actions taken by the United States in recent months. One is U.S. Inflation Reduction Act, passed through Congress last summer, which created huge benefits and subsidies for American-based businesses working in clean technologies, renewable energy, electric vehicles and other related fields.
Many Canadian companies are seriously looking at moving their operations to the U.S. to take advantage of those benefits, and the Canadian government tried to stem that flow with significant targeted tax credits in the last budget.
Many global trading relationships are regulated by the World Trade Organization. So when there are disputes and difficulties, such as the softwood lumber issue between Canada and the U.S. or U.K. cheese quotas entering Canada, countries can appeal to the WTO to iron out those differences. Canada has relied extensively on this process in dealing with more powerful trading partners.
Unfortunately, the U.S., under former president Donald Trump, decided the WTO was not being fair to the it and refused to name its representatives on the boards that hear trade appeals. That brought WTO actions to a grinding halt.
We brought up this matter to everyone we spoke to, especially the U.S. Trade Representative, since this lack of an appeal process is a real impediment to our trade. Canada has been leading an international effort to negotiate a solution to the impasse but as of yet, the U.S. has shown little sign of shifting its views.
At every meeting, I brought up the subject of the softwood lumber dispute, one of the longest disagreements between Canada and the US. At the heart of the issue is the legal ability of U.S. lumber corporations to file complaints with the American government about Canadian products.
Repeated cycles of these complaints have been dealt with over the past 40 years, and while Canada consistently convinces tribunals that, under the WTO and NAFTA these complaints are groundless, the process lasts so long that each cycle results in Canadian mills closing.
I pointed out to the U.S. Trade Representative officials that process smacks of bullying—American companies are filing these complaints simply because they know they will benefit in the long-run, even though they are not on the right side of the law.
I used the recent example of the Vaagen mill closing in Midway, a relatively small American company with two mills, one in Canada and one in the U.S., that was forced to close the Canadian mill in part because of the illegal tariffs.
The National Association of Homebuilders pleaded with us to keep up our lobbying efforts to end the dispute as it is adding significant costs to their members and anyone building a home in the U.S.
Our meetings in Washington will obviously not solve these and other problems overnight. But I think it is imperative we keep reminding our American neighbours that Canada is an essential part of their economy, as much as the U.S. is a part of ours.
While Capitol Hill in Washington was consumed with the debate about the debt ceiling crisis last week, I think we made a small difference in keeping the conversation between neighbours going.
Richard Cannings is the NDP MP for South Okanagan-West Kootenay.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.