NCPA - National Center for Policy Analysis

U.S. Trade Maneuvers Upset Canadians

June 4, 2002

Protectionist trade policies initiated by the Bush administration are causing Canadian officials deep concern. Ottawa has become sufficiently frustrated that it has authorized 20 million Canadian dollars (US$13 million) for a public relations campaign in the U.S. to combat the trend.

  • Since the North American Free Trade Agreement took effect in 1994, trade between the two countries has more than doubled to $1 billion worth of merchandise a day -- generating a Canadian trade surplus with the U.S. of $60 billion last year.
  • At issue are the massive U.S. subsidies to farmers in the recent farm bill, 27 percent duties imposed at the end of May on Canadian lumber imported by the U.S., as well as interventions involving energy.
  • The stakes are high for Canada -- which ships 85 percent of its exports to the U.S., including one-third of the lumber used to build American homes.
  • It is also the biggest supplier of energy to the U.S.

U.S. officials point out that Canada was excluded from U.S. steel tariffs; that no duties are imposed on Canadian wheat, despite complaints from U.S. producers; that Canada has 12 antidumping actions against the U.S.; and that Canada shelters industries of its own, such as poultry and culture. For example, an American can't own a bookstore in Canada --even if it sells only Canadian books.

Source: Joel Baglole and Christopher J. Chipello, "Why Can't NAFTA Smooth U.S.-Canada Trade?" Wall Street Journal, June 4, 2002.


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