Let's Make a (Softwood) Deal!

Update 27 April 2006 - Stephen Harper makes it official, and it's better than the framework announced yesterday. $4B to be returned, and no quotas or tariffs at current prices. Full details available at the Prime Minister of Canada's website.

By the looks of the television news, when they're not showing ghoulish photos of private military funerals and thumbing their noses at Harper for doing so, it seems as though we may have a framework in place for a deal with the United States to end our long-standing feud over softwood lumber. The deal, as it stands, will compel the Americans to return 78% of the $5 billion collected in countervailing duties over the past few years (approximately $3.9 billion, better than Martin's suggestion of $3.5B or demand for all of it, depending on the day of the week, both of which netted nothing), while putting a cap on Canadian lumber to 1/3 (34%) of the total American market. It's an arrangement that thus features compromise by all parties, as any good negotiation will provide. Most Canadians should be happy that we've got a tentative deal in place; but some Liberals are screaming that Stephen Harper has sold out Canada, and the Liberal McGuinty government in Ontario is making caustic tones that it may scuttle the deal. They're furious that Canada doesn't get 100% of its money back and that there's a limitation to how much we can export to their market. "We've got NAFTA rulings!" Yes, but they've got WTO rulings. There was a stalemate because for too long both sides clung adamantly to the rulings that went in their favour and in demanding an absolute position for everything, got nothing. Thus, compromise.
Welcome to an asymmetrical relationship. These types of international relations are covered in just about any introductory course to Political Science. It doesn't take a super-genius to realize that the Americans are much more powerful than Canada and that sometimes we're going to have to bite our tongues to curry good favour. A discussion of values vs. interests is also basic political science: should Canada pursue a liberal or a realist foreign policy? A realist approach would by no means suggest that Canada would have had to sign on the Land Mine Treaty, join BMD, or join the coalition in Iraq (indeed, many foreign policy realists argued that America shouldn't have been in Iraq because it has no vital interests there--really puts the whole "war for oil" bullshit to the test). Being in an asymmetrical relationship doesn't mean we have to always agree or always disagree, but if we are going to disagree we'd better damn sure not be disagreeable about it. Notice that there was no significant deterioration of Canada-US relations when Mulroney said he didn't want to be a part of SDI? Here's why: he was straight-forward and forthright in his rejection of the American concept. He didn't attempt to lambaste the Americans for doing something they felt was in their interests, he simply said that it wasn't in the Canadian interest and let it be. Contrast that with Canada's "party of Heaven" attitude towards BMD and Iraq, where the government took it upon itself to act as a moral champion to lecture the Americans on the Security Council's virtues and spouted empty rhetoric about starting an arms race and neglecting the ABM Treaty (a fact that somehow Canadians managed to miss the news that the Americans walked away from this bilateral agreement with the Soviet Union in late 2001, with little opposition from the Russians). This came only after the government changed its mind about 3 or 4 times as to what its course of action would be.
This deal is by no means a sellout, and it's laughable that Cherniak and others would suggest as much. Obviously there's a lack of understanding of how diplomacy and negotiation works. For years Canada's position has been an absolute end to the countervailing duties and full repayment of the $5B collected already. Every time we hold to this absolute position, the Americans have walked away. It is senseless to continually present them with the same demands unless we want them to continually walk away and leave no deal at all in place, thus permitting the countervailing duties to continue. It doesn't matter how many NAFTA rulings come down in our favour, it doesn't matter how many WTO rulings come down in the Americans' favour. In order to achieve a deal, both sides have to make concessions to one another. Again, the nature of an asymmetrical relationship comes into play: because the Americans have greater power and greater resources to obtain softwood lumber elsewhere (even if it's not as high a quality as the Canadian lumber), that puts Canada in a position where we're negotiating from a point of relative weakness. There's about four billion reaons that getting 78% of the $5B back is better than getting 0% of it back, which we were going to receive had we demanded 100% of it back. Getting a 1/3 share (sorry, 34%) of the total American market is no small feat, given that there's still quite a few trees left in that Kyoto-hatin' cowboy nation (that's my lame attempt at anti-Americanism). Is it as much as we were getting before all the duties were slapped on our exports? I don't honestly know, and if someone wants to provide me with the figures, that'd be much appreciated.
But before people go on babbling and spewing rhetoric about how Harper sold Canada's softwood lumber industry down the river just to get a deal with the Americans and prove his negotiation bona fides, just remember that having what might be a bad deal (and there's not much evidence to suggest that it actually is a bad deal. Time will tell) is far better than what Martin was able to get: no deal. The countervailing duties will be ended, we'll be getting money back, and we'll have significant unfettered access to the largest economic market in the world.