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Some Trade Issues Divide US, Canada


President Bush recently visited Canada, his first trip abroad since his re-election. The two neighboring countries are strong allies and have deep ties that bind them. But there are some issues, especially dealing with trade, that still divide Ottawa and Washington.

Trade is the most important component of U.S.-Canada relations. Each country is the other's biggest trading customer. Eighty-four percent of Canada's exports go the United States and Canada buys more than 70 percent of its imports from its neighbor.

So it was no surprise that when President Bush visited Canada, trade issues - and especially contentious trade issues - were high on the agenda in discussions with Canadian Prime Minister Paul Martin.

Charles Doran is Director of Canadian Studies at the Johns Hopkins School of Advanced International Studies in Washington, DC. He says one major disagreement between the two countries deals with Washington's tariffs on the import of Canadian softwood lumber, such as pine. "There is a huge amount of trade in lumber between Canada and the United States. Canadians sell a large amount, billions of dollars, and the argument has been on the part of a small group of producers in the United States that Canada has subsidized this. Now the NAFTA (North American Free Trade Agreement) and the World Trade Organization, in dispute resolution panels, have denied that there is unfair subsidy. But in fact, every President for some time has been unable to unravel the legal challenges and so on, to get rid of that issue," he says.

Following the Bush-Martin meeting, the softwood lumber issue remains unresolved.

Professor Doran says another problem stems from the US action to ban beef imports from Canada because of mad cow disease. "There was one cow found in Alberta with this disease, but the consequence of that has been enormous in the sense that trade for beef, for the United States and Canada has been affected and third markets like Japan and Europe. They are trying to get around this problem. They are trying to establish common standards, but it's hard to believe, it's almost hard to imagine how one cow could cause that much catastrophe to this industry in North America," he says.

Canadian statistics indicate that the 18-month ban has cost the Canadian beef industry more than $4 billion in lost revenues. That issue, too, still remains to be solved following the Bush-Martin summit.

Tied to those two trade issues, is the question of security along the Canadian-American border - at nearly 9,000 kilometers the world's longest undefended frontier. Both countries have stepped up cooperation in the security field, especially after the terrorist attacks of September 11, 2001.

Kim Nossel, Director of Political Studies at Queen's University in Kingston, Ontario, says Americans and Canadians are approaching the border security issue from different angles. "From the American perspective, there is the concern about the porousness of that long, undefended border and the ease with which one could in fact get across the border. From a Canadian perspective, the major concern is an absolute fear that there will be a terrorist incident in the United States that will openly and manifestly have come from Canada, that will lead to, essentially, a closing of the border. And of course that border and the openness of that border is absolutely crucial for Canadian wealth."

Experts say Ottawa and Washington have to find a delicate balance between the free flow of commerce and legitimate security concerns.

Gill Troy is a U.S.-Canada expert at McGill University in Montreal. He says despite various disagreements between the two countries, one overriding issue must be kept in mind. "Even if there is an agreement to disagree, even if the United States says: 'look, we can't do this because of internal constituency pressures or external trade pressures,' the awareness that nevertheless, while we might part on some issues, we are still fundamentally friends, we are still fundamentally linked in so many ways - economically, ideologically, intellectually, culturally, socially - is important," he says.

Experts agree that President Bush's trip to Canada was an attempt to improve relations between the two countries - relations that were strained in recent years, during the tenure of Canadian Prime Minister Jean Chretien. Analysts say based on the recent Bush-Martin meeting, things are looking up.

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