Midterm 2006 Fall - Question 1 A. Describe and explain the...

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Question 1 A. Describe and explain the proposed the Softwood Lumber Agreement Softwood lumber has always been the most argumentative trade issue between Canada and the United States in decades. Softwood Lumber Agreement (SLA), which was made in May 1996, restricted exports from four Canadian provinces (Quebec, Ontario, Alberta, and British Columbia) to the United States between 1996 and 2001. The limitations were set on the quantities of free lumber could be exported and a fee system by producing beyond levels. “For the first 650 million board feet and anything above the free 14.7 billion, the fee would be US$50/thousand board feet and anything above the 15.35 billion board feet could be exported at a fee of US$100/thousand board feet”. (1) The SLA also allowed for Canada to export additional lumber if U.S. market lumber prices exceeded a trigger price in any quarter. It benefits U.S. customers from the nearly solid market price of lumber. At the same time, some Canadian companies were also benefited, no fee could be asked in 60 days after some extraordinary event happened and no duties were collected when a company exported 10 million board feet lumber or less. Thus, it is obviously showed that the agreement was mainly against large lumber producers. However, the SLA did not cover other Canadian softwood lumber-producing provinces and the agreement also left the obligation to Canada to distribute federal export quota for four covered provinces. The SLA was expired in 2001 and the softwood lumber war between US and Canada continues until the new agreement was proposed in this year. B. Explain how the interests differ between the federal and provincial governments The federal and provincial of Canada generally have different power and interests. We can assume Federal as micro compared to province as macro. Both Federal and provincial 1
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governments wants to achieve the benefit for their own interests in different area of obligations. The federal government of Canada is the level of government where make most of economic decision and responsible for things that affect all of the country. It is mainly dealing with “regulation of trade & commerce; unemployment insurance; rising of money by any system of taxation; borrowing of money on the public credit, post service; banking & incorporation of banks; printing money and military.”(2) The federal governments attempt to apply policies to improve the performance of the economy. In particular, country’s overall economy directs connects to Canadian industry, most importantly in international trade in the recent years. In the domestic, “the federal government tries to manage regional differences three ways: Industrial Incentive Programs, Infrastructure Assistance Programs and Social Adjustment and rural Development Programs”. (3) These programs are created to insure the job creation, Sustains families, Dignity, Politics and Economy to be healthy. In the international, federal government has the duty to deal with other nations by negotiating the
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Midterm 2006 Fall - Question 1 A. Describe and explain the...

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