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PM links softwood dispute to energy
By SHAWN MCCARTHY
Friday, October 7, 2005 Page A1
NEW YORK -- Prime Minister Paul Martin warned Americans yesterday that the Bush administration may be jeopardizing secure access to abundant Canadian energy supplies by undermining NAFTA in the protracted softwood lumber dispute.
And while he complained about the fraying of the North American partnership, the Prime Minister reminded his New York business audience that China and India have an enormous and growing demand for raw materials -- an appetite Canada is happy to feed.
"For us, there is no doubt, China and India represent an exciting new opportunity that we intend to take advantage of."
While he leavened his address with a declaration of undying friendship and shared values, Mr. Martin's tone was blunt, at times even chippy, over the U.S. handling of the softwood controversy.
"Forgive my departure from the safe language of diplomacy, but this is nonsense," he said. "More than that, it's a breach of faith. Countries must live up to their agreements.
"We have to recognize that NAFTA is a framework, not just for the trade of commodities, but for the trade of most goods and services, investment and energy," he said. "And for this to operate smoothly, we have to rely on the dispute-settlement mechanism."
The Prime Minister travelled to New York to deliver an indirect but unmistakable message that the ongoing softwood fight is undermining the Canada-U.S. relationship -- including unfettered energy trade.
Mr. Martin also slammed President George W. Bush's plan to open up the Arctic National Wildlife Refuge for oil drilling, saying the damage to the environment would far outweigh any modest addition to U.S. crude supplies.
The visit yesterday was Mr. Martin's first since becoming Prime Minister, with the exception of trips to the United Nations. He gave a dinner speech to the Economic Club of New York, sat for an interview on CNN and attended a meeting of The Wall Street Journal editorial board.
The Liberal government has been frustrated since August over the refusal of the Bush administration to abide by a NAFTA panel ruling favouring Canada and ordering the return of $5-billion in tariffs collected under U.S. anti-dumping rules.
Yesterday, Mr. Martin sought to ratchet up the pressure on the administration by making a direct appeal to U.S. consumer and business interests, which end up paying high lumber costs as a result of the tariffs.
But on Wall Street these days, the name of Canada conjures images of endless energy supplies. And the Prime Minister sought to capitalize on that interest by making a broader point about fair play between free-trade partners.
Mr. Martin said the U.S. government has undermined the dispute-settlement mechanism of the North American free-trade agreement. That same dispute mechanism, he noted, governs more than just softwood trade, but also trade in energy, where the U.S. is increasingly reliant on Canadian sources.
On CNN, Mr. Martin again appeared to connect the dots between the softwood dispute and energy exports. After complaining about Washington's decision to ignore the NAFTA panel's ruling on softwood, the Prime Minister addressed questions on how Canadian oil sands can help satisfy the U.S. thirst for oil.
"We are your largest single supplier and we are going to continue. We're not going to let the Americans down, but we want to see that partnership work in the widest possible way," he said.
Mr. Martin was walking a fine line with his message. For years, federal and Alberta politicians, and Canadian executives, have journeyed to New York and Washington to promote oil-sands development, which requires massive capital investment, which is often raised on Wall Street.
The Prime Minister spent little time in his speech extolling the potential of the oil sands, except to suggest that the reserves there would be more than adequate to offset any loss of potential production if the U.S. protected the Alaskan refuge.
In his address, and in the questions after posed by Robert Hormats, vice-chairman of Goldman Sachs International, and Rodgin Cohen, of the Wall Street law firm Sullivan & Cromwell, Mr. Martin hammered on the theme of a rapidly changing world, with the rise of China and India as both markets and competitors to the U.S. dominance.
The emergence of such competing powers, he argued, made it essential that Canada, the United States and Mexico enhance their economic position through NAFTA. He noted, however, that the rise of the Asian powers will provide Canada with new markets for raw materials and other exports that have traditionally gone to the United States