Thank you Madam Chair for the invitation to be here with you today.
As you know, my name's Mark Warner. I'm a Canadian and American trade lawyer. I have been associated with the softwood lumber file for many years, dating back to before I was a law student. I worked for the late Professor Alan Rugman at the University of Toronto. I worked as an American lawyer at various law firms that represented Canada, and then as legal director of the Ministry of Economic Development, Job Creation and Trade in the Province of Ontario. I've seen this from multiple different perspectives as an academic economist, an American lawyer, a Canadian lawyer, as someone who pays the bills for the lawyers in the United States and someone who gets paid by Canadians in the United States to talk about softwood lumber.
The interesting thing is that this file has been around forever. The way that I look at this file, as I've looked at it over a great many years, it seems to me that it's not really the kind of trade dispute that lends itself to fundamental, permanent dispute resolution. Fundamentally, what is going on in this file is a battle of conception of trade law and policy. To the American mind, they look at practices in Canada around lumber, timber and forest management, and they see non-market economics. We may not agree. To us, we look at a bunch of trade agreements and say, as Canadians, “We've negotiated these trade agreements with you and we think that we can go through a series of trade dispute fora, whether it's under the old NAFTA—now the CUSMA—or the WTO, and we can win narrow, technical victories based on legal or accounting issues, and then, we can fight again”.
I don't see really an end to that, unless we find some mechanism to make the American producers cry uncle. My guess is they probably won't do that, even with all of the best arguments about the cost of houses and all of that.
The American trade system—not unlike ours, because we have the same fundamental base—is a system that's based much more on producer interests than on consumer interests. In the American perspective, as well, there are some processes that American producers can launch. We always take that in Canada as being the launch of a political process. From the American perspective, it's just the producers following their law. Their rule of law means that they go through a process.
If we think today about how softwood lumber fits into where we are, it seems to me that the fundamental question for Canada is whether we are okay with this. Do we want to keep on going on, having disputes that we settle through these various international trade fora, or do we want to find some way of negotiating some kind of a market access solution or rules to buy some measure of peace? I get that, with the most recent situation with the economics on both sides of the border, the answer to that is no.
The question I have is where this issue of softwood lumber fits into the larger trade relationship between Canada and the U.S. It seems to me that if we're looking for a political settlement, as opposed to continuing on the legal route, you're going to have to rely on the goodwill, to some extent, of the various players in the United States at the government level. I have some concerns that we have, perhaps, been a bit more bellicose in the way we go about trade policy. Part of that is understandable, in relation to the last occupant of the White House, but it has carried forward into this new Biden presidency. It seems to me that we have our elbows up as we go into the corners a lot. At least, I think that's the perception in Washington.
The question then is whether there is an opportunity here to look for a grand bargain, where we can say to the Americans, “If you help us with softwood lumber and Keystone” or whatever it is, “we will make some concrete attempts to deal with some of the issues that are front of mind to you, having regard for the global trade situation of supply chains and critical minerals.”
There, I think that probably means doing more than talking about critical mineral supply, but actually figuring out how we can be more like the Australians. How can we actually get the critical minerals to market quickly? That's what I think.
I'd add that although the Canada-U.S. softwood lumber dispute dates back a long way, the other piece that I think is less well understood in Canada is that we're now tied into a much larger debate between the United States and China. As we can see by all of the events going on in the world today, that's front and centre for Americans in terms of their foreign policy and their foreign economic policy.
It just so happens that the issues at the centre of the dispute in terms of dumping and that sort of thing go to the heart of the American dispute with China in terms of the use of what we call “zeroing” in the practice of anti-dumping and countervailing duty cases.
That's part of what I would just put out there. As difficult as it has been over the last 35 years to deal with this issue, it's even harder now to find an opportunity for the Americans to find a trade law solution that is specific to Canada without implicating their larger trade law disputes with China.