Thank you, Mr. Chairman.
My name is Gordon Ritchie. I chair the public affairs practice at Hill and Knowlton Canada, which includes the B.C. lumber industry among its clients. But I should underscore the fact that I'm speaking today strictly in a personal capacity, based on my involvement in this file over--I hate to admit it--a quarter of a century and counting.
My comments will be based on the term sheet of the agreement announced in the House of Commons by the Prime Minister. I stress that because in these matters the devil always lies in the details in finalizing the agreement, and the Canadian negotiators will always have a tough time standing their ground against never-ending American demands. It seems the Americans regard an agreement as the basis for beginning negotiations instead of as a conclusion.
I would infinitely prefer to see free trade in this sector, or at least have the Americans abide by their free trade obligations. Regrettably, they've consistently refused to do so in the past. I'm referring to the Reagan administration, the George W. Bush administration, the George H.W. Bush administration, and the Clinton administration. They show no willingness to abide by their obligations today. The Department of Commerce and the international trade commissions have acted as the lackeys of the protectionists.
From the outset of the free trade negotiations, the Americans insisted on carving lumber out and managing this trade under the infamous memorandum of understanding of 1986. When that was terminated and the Americans lost their case before the free trade panels in the 1990s, they refused to pay back the duties until the softwood lumber agreement was concluded. This time around, the administration's refusal to stop collecting duties, let alone pay back the duties already collected, is a flagrant violation of their NAFTA obligations and the provisions of their domestic law.
Those concerned about setting a precedent are unfortunately closing the barn door long after the horse has galloped away. It's highly distasteful that a great power should behave like this and allow its national interest--as I'm sure Mr. Rutenberg will be explaining--to be subordinated to the greed of a handful of producers. But it would be even more objectionable for Canadian producers to continue to be penalized in order to make a theoretical point.
Some have argued before you that the litigation route is about to bring a favourable end to the lumber dispute. I respect their view, but everything in my knowledge and experience suggests that this is untrue. Litigation will only breed more litigation and uncertainty. In my view, it's in our interest to bring the litigation to an end and establish a stable framework for future lumber trade.
I am satisfied that this agreement, as laid out in the term sheet, is the best one that can be negotiated at this time. It is far from perfect, but it is acceptable. It ensures a reasonably stable market environment for Canadian exporters for the next seven years, and possibly longer, under a wide range of market circumstances, in return for measured restrictions in times of depressed prices, and expanding Canadian market shares.
I understand that two points are particularly contentious. The first is that the agreement leaves $1 billion in the U.S., of which half is to go to the coalition. As I said to their faces across the negotiating table last year when I was representing a previous government, I do not believe they have the legal or moral right to one penny of these deposits. Nonetheless, we have for some time accepted the principle that we were prepared to hold our noses and pay it as ransom to free our industry to continue to supply American lumber requirements without future harassment.
The second contentious point arose when the agreement was reached and the coalition lawyers immediately announced they would remain very active scrutinizing every aspect of provincial forest management policies, including the B.C. market pricing reforms, to ensure that those cunning Canucks did not circumvent the agreement.
This is completely unacceptable. It was this sort of extraterritorial micromanagement and bullying that blew up the original memorandum of understanding in 1991. It would represent an intolerable sacrifice of Canadian sovereignty, both federal and provincial. This demand should be dismissed as overreaching by the most bloody minded of the coalition, and should not become the basis for breaking apart the deal.
So on that basis, I would urge you to support the agreement on the softwood lumber trade with the United States, as announced on April 27.
Thank you, Mr. Chair.
I am perfectly prepared to answer your questions, either in English or in French.