International Trade Committee on Oct. 3rd, 2006

[Michael Solursh]

The London Court of International Arbitration is an independent forum, so that's one benefit. It is a well-established and highly respected arbitration court. Its rules are highly established and well-respected, so we thought it was best to go under those rules. There are arbitration rules that govern the process, and countries can modify those rules if they want to. So any dispute goes through that arbitration process--panel selection, any of those rules are governed under this dispute settlement system. We have adopted their rules with some modifications.

[The Chair, Conservative, Leon Benoit]

I don't know if you've finished answering Mr. Menzies' questions, Mr. Robertson.

[Paul Robertson]

I think I hit on the major elements of your question, Mr. Menzies. Was there anything else?

[Ted Menzies, Conservative, Macleod, AB]

I just want to be clear that this committee, from my understanding, has never asked to be part of the selection process.

[Betty Hinton, Conservative, Kamloops—Thompson—Cariboo, BC]

The House never approves appointments.

[Paul Robertson]

In my response I didn't presume to rule on the role of this committee. I just said I would take note of the comments made on this issue by both sides.

Would that be a fair assessment, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Sure.

Mrs. Hinton, did you have a question?

[Betty Hinton, Conservative, Kamloops—Thompson—Cariboo, BC]

No, I don't have one. I listened very carefully, and the answers were very good. I like the short format.

The answer on the arbitration is yes, it's final; yes, it's binding. Correct?

[Paul Robertson]

That's what it says in the softwood lumber agreement.

[Betty Hinton, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

[The Chair, Conservative, Leon Benoit]

Mr. Julian, go ahead, for five minutes, please.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much, Mr. Chair. I have finished my questions, but a couple of points come up that bear correction.

The first is on dispute settlement. If the United States does not accept the arbitral award, the only recourse is termination of the agreement. That is very clear from your testimony, and I want to make sure the record reflects that.

Second--and this is an important element--we had much testimony this summer that dealt with this issue of what happens when we terminate litigation. The reality is that by terminating litigation, we cannot go back into court. We don't have the precedents or the jurisprudence. So there is a cost of eliminating that litigation.

And I think--I'll make my comment before I ask my specific question--that is why dozens of companies have refused to terminate litigation, which is why the agreement is, quite frankly, in so much trouble. It wasn't implemented October 1, and it's unlikely to be implemented for November 1. The companies are refusing to terminate their litigation because they know that ultimately if the deal falls through, if there are other attacks on Canadian softwood, they'll have to start from scratch. It would be unfair, I think, to intimate that somehow the litigation could be picked up and taken later.

The termination of litigation means we start from scratch, and that is my question. Can you confirm that? The companies terminating litigation have, in a sense, ceded their rights, and if this agreement does not go through or if the United States or the coalition chooses to target Canadian softwood in the future, those companies will have to start over.

Can you confirm that?

[Paul Robertson]

First of all, I didn't want to imply that we could pick up and terminate litigation where we left off. That was certainly not my intention.

What I was alluding to when I said “without prejudice to the legal decisions taken to date” is that in the course of this litigation, there were decisions taken in the WTO, NAFTA, and U.S. court that are on the books and relate to specific aspects of the softwood lumber litigation process and that whole myriad of litigation that has been undertaken in that regard. Those decisions reside in terms of governing elements on how you proceed with pass-through elements of this and zeroing in on that, all in relation to the two positions relating to how we litigate it through this process. That's all I meant with respect to “without prejudice to”.

I certainly did not want to imply, and I apologize if I did leave the impression, that somehow we could pick up litigation where it ceased under the softwood lumber agreement, because that litigation is terminated upon its coming into force. So if I misled anybody, it was unintentional.

[The Chair, Conservative, Leon Benoit]

Does anybody else have a pressing question?

Thank you very much, gentlemen, for your information and for your answers today. It was a very helpful meeting. I think there was a greater understanding at the end of the meeting than there was at the beginning about all of these bodies.

Thank you very much for coming. I look forward to seeing you again.

The meeting is adjourned.