- The Washington Times - Monday, October 24, 2005

OTTAWA — Secretary of State Condoleezza Rice, paying her first visit to America’s northern neighbor after nine months in office, got a quick lesson yesterday on Canadian sensitivities over a trade dispute involving softwood lumber.

Before Miss Rice even arrived in Ottawa for an overnight visit, Prime Minister Paul Martin had told reporters he was going to give her a tough time over $3.5 billion in contested duties that Washington has collected on Canadian lumber since 2002.

“Friends live up to their agreements,” Mr. Martin said ahead of a working dinner last night with the secretary of state.

“We have differences, and we are going to have those differences because I’m going to defend Canada,” he continued. “I’m not going to stop simply because, in fact, that the truth sometimes hurts.” The softwood duties have upset Canadians since the Bush administration imposed tariffs averaging 27 percent three years ago, saying it had to protect American manufacturers from cheap Canadian lumber that was being dumped into the U.S. market.

Canada successfully challenged the tariffs under mechanisms provided by the North American Free Trade Agreement (NAFTA), but the United States refused to drop the fees and went on to win a recent ruling in its favor from the World Trade Organization.

That failed to impress Mr. Martin, who insisted yesterday, “NAFTA trumps it.” Miss Rice, warned about the ambush the prime minister had set for her, made clear to reporters traveling with her to Ottawa that Washington would not capitulate without further talks.

“I don’t think the time for negotiations is past,” she said. “We would like to see a negotiated settlement on this.” At the same time, she urged that things be put “in perspective.” The lumber imports are only “a small percentage of our trade” and “we are very large trading partners.” Canadians already were nursing bruised feelings, however, over the fact that Miss Rice has logged nine months on the job and hundreds of thousands of miles of air travel before taking time to visit the country that used to bill itself in travel ads as “so friendly, so foreign, so near.” An earlier visit scheduled for April was canceled after Canada said it would not participate in the U.S. missile-defense plan. That decision seems no longer to be a problem, with Miss Rice saying it was a decision for Canada to make.

Mr. Martin, for his part, came to office almost two years ago promising an era of improved relations with Washington after the Iraq war and other issues had severely strained American ties with his predecessor, Jean Chretien.

But the Bush administration’s policies are deeply unpopular in Canada and the new prime minister, who has struggled with corruption scandals left over from the Chretien period, faces a difficult election within months.

Even so, he said yesterday, “Obviously, I think the … relationship is working well.” Miss Rice meets today with Foreign Minister Pierre Pettigrew.



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