Tuesday, March 21, 2006

Quick. Cancel NAFTA.


The solution is so, so obvious. First, we have the Americans, being the complete dicks they've always been with respect to NAFTA and softwood, even in the face of a unanimous ruling against them:

The U.S. Coalition for Fair Lumber Imports was not happy with the ruling.

"The NAFTA panel decision issued today is gravely flawed, and signifies a potential end to an important antidote in the U.S. lumber industry's efforts to counter the poison that is Canadian lumber industry practices," coalition chairman Steve Swanson said.

The Canadian industry gets "enormous subsidies" and "we will not stand for this absurd and unjust result," he added.

At the same time, we have the spectre of the U.S. using other provisions of NAFTA against Canada (as quoted here at POGGE):

Since the signing of NAFTA in 1992, gas exports to the US have sky rocketed from 41% to 56% of our total Canadian production, and oil from 44% to 63% of production. What’s more, as US exports continue to balloon, NAFTA prevents us from reducing this share to meet Canadian priorities.

The solution is simple: Cancel NAFTA. Just rip it up. At the moment, it would seem that it's not doing us any good, while it's simultaneously being used as a club by the Americans to extract Canada's natural resources.

Now, I am not a lawyer but the U.S. refusing to abide by NAFTA's rulings on softwood lumber strikes me as a fairly straightforward breach of contract, no? Which typically gives the aggrieved party the opportunity to void the contract and walk away. It strikes me that this is the perfect time to do just that.

So, quick -- let's cancel NAFTA while we have the chance. When you realize you've signed a really, really bad contract, there's nothing that should make you happier than to find out the other party is breaking its terms. Let's walk away now while the U.S. is doing just that.

8 comments:

Alison said...

Any party to NAFTA can opt out of it by giving six month's notice.
The difficulty will be electing a government that will do it.

Anonymous said...

It won't be Harper, that's for sure.

Phyl said...

The way the U.S., under the Bushies, is so fond of simply deciding, "Hey, we've decided to pull out of the treaties we've signed," we should have no trouble pulling out of NAFTA.

katrina said...

Conveniently, as it turns out, I am a law student, and conveniently I am sitting in a contract law class learning about fundamental breach of contract. There are a few considerations: where was NAFTA signed? If it were in Canada, than it would fall under law that I actually know about... If this were so, than this could constitute a fundamental breach of contract, which would void the contract as to the date of the breach (i.e. the date that the tariff was first levied). This would mean that ALL monies lost in the tariff would be returned to Canada. A fundamental breach is where a contract is breached in a way that goes to the root of the contract. It would be difficult to argue against the fact that imposing a trade tax on a country that is party to an agreement that is designed to eliminate trade tax would constitute a fundamental breach of contract.

If they were to opt out of NAFTA through providing notice, the monies might not be recovered. Suing for breach of contract would be a more effective way in which to recover both the money as well as the more indirect but provable damages of companies who have really suffered/laid of staff/gone bankrupt under this unfair and illegal tax.

Presumably, however, an army of lawyers have drafted this agreement, so who knows how the whole thing would turn out.

Grog said...

Katrina,

While I'm no lawyer, I believe the understanding of international treaties such as NAFTA is that they are deemed to have been signed in both countries once their respective governments have ratified them.

- Please correct me if I'm completely out to lunch on this one.

Breaking the agreement then is mostly a matter of an act of Parliament.

Sadly, I suspect we'll be hoovered in King George's war in Iran before we get Harper out of government.

katrina said...

I admittedly have no idea about the ratification of treaties, given that I am only in my first year here so we just learn the basics of public/private domestic law. It was just a parallel thought to the class I was sitting in - now I am in torts, so I can rant away in a much more unsubstantiated fashion.
I wonder, though, about the wisdom in abandoning NAFTA given the 4 billion or so dollars that are sitting in the coffers of America. If we simply give notice and withdraw, we will likely not see the money again. With all of the unanimous rulings in our favour, at the very least, even if we have not yet received the money, we are contributing to the shitty reputation of America. The more the rulings roll in, the worse our neighbours look on the world's stage. Any contribution we can make to damage the credibility of our bible slinging, iraqi baby killing, illegal-war-and-torture campaigning, treaty breaking neighbours to the south (and by that I mean those who are complicit in it [read: unquestioning republicans] not to generally implicate those who work for a progressive america) the better. Of course S-Harp won't pull us out of NAFTA but he has actually managed to showcase a set of balls over that ridiculous (sustainable, and the least of our worries) seal hunt, hopefully the same balls will remain when he (okay I am am reaching; read 'if he') comes up way to tell Dubbya to shove the softwood tariff stright up his ass. Don't get me wrong, I feel like crying every time it crosses my mind that that S-Harp is at the helm, however, perhaps he can use his "against Canadian values to cut and run" rhetoric someone where it is, at the very least, economically valuable.

Mike said...

Don't worry, we won't see the $4B under any circumstances!

Scotian said...

Katrina:

I believe the fundamental breech would be the ignoring of the dispute resolution mechanism itself since it applies to all commodities/services covered in NAFTA. If America is unwilling to be bound by this mechanism they have in effect stated that the enforcement mechanism within the treaty does not bind them, and without that the treaty itself becomes unenforceable. This is one of the main reasons the lumber dispute is so significant (aside from the Canadian economic damages being done that is) even though it is such a small fraction of the total goods/services NAFTA covers.

As I understand it enforcement mechanisms are a fundamental component of a treaty, so if it no longer being respected by one side, as in the case of America in the lumber dispute, then it would seem by definition one has a fundamental breech of contract happening. Does this fit with your own understanding ? Well, at least as much of one as you have as a first year student in contract law that is.