E TRADE .S. duties ighlights ree trade Sellout By SEAN GRIFFIN actions by U.S. agencies last week, have to protect U.S. economic inter- : highlighted once again the threat Canada by any free trade deal with os 18, the U.S. Trade Representa- TR) announced that financial servi- ul removed from the free trade |, ons, a further indication that the ch nds to keep off the table any areas ~Itenjoys a substantial trade advan- With Canada. _ 4 few days earlier, the USTR dor that it was beginning the process niet pe nPosition of yet another pro- , this time against processed 0 salmon. ‘Wo actions, which follow a quick 10n of U.S. trade measures against N exports, emphasize forcefully ge Communist Party and other tS of free trade have repeatedly _— ~ that U.S. trade policies are aimed S$ Ncluding Canada, and that it will use * trade negotiations to further that to Canada’s detriment... 4Pplication launched earlier this ‘by 10 Washington State and Alas- dis, .. Pe OCessors for a tariff against Can- On exports is only the latest move ig campaign by U.S. producers to reduce Canadian imports in oa products have traditionally y. peat months, tariffs have been levied fal against east coast groundfish, ' cod and raspberries as well as t and Shingles. In addition, U.S. beef Rdys.. “?¢ currently seeking countervail- *S against Canadian beef. ace ; y the most devastating to this 18 the present application by the Producers to levy a 27 per cent =. ost Canadian softwood exports on that British Columbia’s method of er empage against lumber com- Siig tes an unfair subsidy. Nast case was rejected by the U.S. lunber Department in 1983 but even that Industry representatives acknow- sth Iwill probably get approval this U.S. changes the ground rules in = curb Canadian exports. 5 oni have already been unilaterally avast groundfish. In April of this Reus, Slapped duty against Cana- oe fish, claiming that industry ,)_ Programs, which were based on inc employment rates, were unfair eee Significantly, in imposing the 1 Commerce Department went cate Tuling which had determined blo exports, also assisted by an nigga based program, were not uable, 8toundfish case should also have Ten’t "bent on pursuing free trade at hes Ue direction that any trade talks th 5 “Us, Were bound to take. ral assistance program that was ~ Of the U.S. action had been S0.as “not to be vulnerable to U.S. ee trade — the o> “le U.S. in an earlier case involv-_ trated to federal cabinet ministers, if ding to Patrick McGuinness, vice-’ Of the Fisheries Council of Can-’ Sy c countervail law.” But the U.S. made its rul- ing despite that. _ The case showed that the U.S. is shaping its trade policies to curtail Canadian exports in any area where Canadian producers have an edge. Although countervailing duties are sup- posedly a remedy against unfair trading practices, U.S. industry, with the backing of the U.S. administration, has been using them wherever they can’t compete, to reduce Canadian market share. That was certainly the case in the shingle tariff and it is the same with the recent application against Canadian processed salmon exports. In that case U.S. compan- ies have argued that Canadian access to Alaskan fish is unfair and are demanding a countervailing duty be imposed. : But United Fishermen and Allied ‘Workers’ Union secretary-treasurer Bill cee Wma ee would reserve to itself the right to determine - what constitutes a countervailable trading practice. Obviously, under that regime, the chief argument of free trade proponents such as Premier Bill Bennett — that a free trade agreement is necesary to defend Canadian industry from U.S. protectionism — simply doesn’t hold water. Under free trade, Cana- dian products would continue to be vulner- able to attack from U.S. countervailing duties, which could be imposed virtually at will by the U.S. administration. There is no reason to beleive that any mechanism that trade negotiators might set up to arbitrate trade disputes would be any less subject to U.S. pressure than the current system is. And that current system has demonstrated that when the U.S. wants to impose protectionism it does so — whatever past rulings may have been. U.S. trade policies are aimed at slashing its trade deficit with other countries, including Canada, and it will use the free trade negotiations to further that process, to Canada’s detriment. Procopation emphasized that the sales in the U.S. by Canadian multinational com- panies like B.C. packers and Canadian Fish are the result of higher quality, more effi- cient plants and the lower Canadian dollar. Canadian pre-eminence in the shake and shingle industry was the result of similar factors. Despite that, U.S. industry is everywhere asking for countervailing duties against Canadian products — and U.S. Com- merce Department decisions are being tai- lored to that demand. That would not change under a free trade agreement as U.S. negotiator Peter Murphy has made clear with his statements that the U.S. would not give up its right to counter- vail in any free trade package. And what is increasingly evident amidst the recent flurry of applications for duties is that the U.S. While the tempo of countervail action has been stepped up in an attempt to curb Canadian exports, the U.S. very much wants to retain the status quo in those areas where it is to its advantage. That was dem- onstrated particularly in the recent U.S. decision to keep financial services off the trade bargaining table. Although Canada now enjoys an overall trade surplus with the U.S., it has a substan- tial trade deficit — about $14 billion — on trade in services, a large part of which is financial services. : Because of the overwhelming U.S. con- trol of the Canadian economy, and consid- erable Canadian borrowing in the USS., most of the flow of interest, dividends and royalties is from Canada to the U.S. — hence the deficit. ’ If you take financial services off the table, U.S. demands for concessions that much _ greater. Significantly, the Financial Post, an advocate of free trade, noted in an article June 21: “If. . .our (trade) surplus stays high — .. the U.S. will continue to press for import relief — and it will be very difficult indeed to negotiate an agreement that doesn’t involve big concessions on our part.” For the U.S., keeping financial services off the table has another role to play, gua- ranteeing that the status quo, as far as U.S. investment in Canada and restrictions on Canadian financial and insurance institu- tions operating in the U.S. are concerned, will remain, to the distinct advantage of U.S. multinationals. ’ In fact, ever since Prime Minister Brian Mulroney floated his free trade initiative, the signs have all been there — an aggres- - “sive demand by U.S. industry for duties on Canadian resource exports, a demand by the U.S. Treasury that Canada revalue its dollar and the announcement exempting financial services — pointing to imminent disaster in any U.S.-Canada free trade talks. Even proponents have acknowledged that free trade would result in the loss of thousands of jobs in Canadian manufactur- ing industries as U.S. multinationals close their branch plants here and serve the Can- adian market from plants in U.S. low-wage areas. But the events of recent weeks should make it clear that, in those areas where Canada enjoy a'trade surplus with the U.S., notably in resource products, the U.S. will reserve the right to impose duties and curb Canadian exports in its own self-interest. At the same time, it will resist any pressure to modify its own trade policies and practices where it currently maintains a trade domi- nance. Obviously, for any government con- | cerned with upholding Canadian sover- eignty, there is only one course of action — cancel the free trade talks and take immediate steps to broaden Canada’s trade and end dependence on the USS. market. - PACIFIC TRIBUNE, JUNE 25, 1986 e 3 FES EF SS SIA PSE FT REGS SISA EI SES