Reckless PM

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The Article

Martin’s a swashbuckling maniac
when it comes to trading with U.S.

Shipping Tycoon Paul Martin is charting our nation into treacherous waters with his sabre-rattling against Washington on softwood lumber, energy and, apparently, just about everything else in our ‘monumental’ economic arsenal.

Martin—one of the richest men in our country, meaning it hardly matters to him how many of the rest of us lose our jobs—is threatening a trade war with the mighty U.S.

That Canada’s economy is roughly only the same size of California seems to have escaped Martin. His threats are hardly going to have President George W. Bush and Vice-President Dick Cheney nervously biting their nails.

Yet Martin’s scenario is not only flawed—it’s frightening.

More than 80% of Canadian exports go to the U.S. One in four Canadian jobs directly depends on those exports, and 50% of all Canadian jobs directly or indirectly are linked them.

If Martin wants to start a trade war with the U.S.—imposing sanctions, instituting penalties and trying to find elusive new markets—where are all the jobs linked to our exports south of the border going to go?

Canada’s most infamous tax haven specialist has the answer: “For the first time in our history we have an alternative. First we sold solely to England, then all to the United States. We had no choice. Now we have choices.”

What choices?—“Rather than looking only to the U.S. market,” he warns Washington, “we will be your direct competitors in China, Japan and Korea.”

He added darkly, “It’s the law of unintended consequences.”

That must be why the captain has two of his cabinet crew—International Trade Minister James Peterson and Natural Resources Minister John McCallum—roaming the seas searching out new markets desperate for our products.

Well, Martin may believe the exporting giants of China, Japan and South Korea need us to shore up their economies and satisfy their consumers but I wouldn’t bet my RRSP on it.

We can bet, though, that Bush and Cheney are hardly cowed by Martin’s assertions.

They must wonder what kind of swashbuckling maniac they are dealing with.

I surely am.

Such reckless behaviour would crash our nation’s economy from one end of the country to the other.

Don’t you just wish Brian Mulroney was at the helm of our country again.

Washington is actually technically right in imposing duties on Canadian softwood exports.

Our lumber industry is subsidized by low provincial stumpage fee rates on Crown land.

That’s the U.S. objection—unfair competition. We were actually ‘dumping’ our softwood lumber on the U.S. market.

In a very real way, until market forces pushed our dollar back up to the 85-cent range, we were dumping just about everything we produced or manufactured on the U.S. market after the Jean Chretien/Paul Martin Liberals purposely drove our dollar to the 65-cent level in the 1990s.

They did that so our producers and manufacturers could basically sell our produce and products to the U.S. at firesale prices. In drastically slashing the value of our dollar, the Liberals also undermined the savings, pension plans, investments and standard of living of Canadians nationwide.

Another result of the low dollar policy was the poor efficiency and productivity of Canadian industries compared to their equivalents in the U.S. and elsewhere.

Industries in other countries had to shape up to compete, while our industries enjoyed what looked like a free ride.

The same scenario was set in motion by Pierre Trudeau and federal energy ministers Donald MacDonald and Marc Lalonde in the 1970s and early 1980s when they dictated a ‘Made in Canada’ price for oil.

Canadians and our industries were ‘protected’ from real world oil prices—but at a huge hidden cost. While industries in the U.S., Europe and elsewhere were forced to become increasingly more efficient to cope with world oil prices our industries were able to take the easy way out. Sit back and yawn, and pretend all was well.

It’s only a coincidence—or one hopes it’s only a coincidence—that Trudeau’s low oil price policy and Martin’s contention we can sell our oil to Communist China rather than the U.S.—are both socks in the jaw to Alberta.

Our province was the whipping boy then, and it’s apparently the pawn the Liberals are willing to play now.

Martin is surely flying the flag of folly.

Paul Jackson
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