Glimmers - faint - of softwood hope

VICTORIA - Rich Coleman is sounding pretty optimistic about progress in the softwood dispute.
Coleman's hope rests partly on this week's deadline for the U.S. to respond to the final NAFTA ruling on the duties. The U.S. lost the case, and was given until this Friday to lift the trade barrier.
The U.S. government and industry have brushed off the ruling. The justifications vary, but the message is the same - forget about NAFTA. The two sides need to negotiate a deal. Secretary of State Condoleezza Rice stuck with that position when she dropped in Ottawa this week.
But despite the dismissive talk from the U.S., ignoring the NAFTA ruling would be a significant step. The U.S. will have a hard time being taken seriously in future trade talks if it is ignoring the deals it has signed.
Prime Minister Paul Martin - belatedly - has also taken steps to pressure American politicians. Martin raised softwood in speeches and interviews in the U.S. this month, getting some media attention.
He made two points in particular that - if skillfully advanced - could put pressure on U.S. politicians to resolve the dispute.
First, Martin noted that the duties push up lumber costs, adding $1,000 to the cost of an average U.S. home. It's a short step to paint the American lumber companies as profiteers exploiting people trying to rebuild after Hurricane Katrina.
And second Martin raised the possibility that Canada would look towards China and other new trading partners if the U.S. can't be trusted. That would include a push to sell more oil and gas to China. Practically, it's only a moderate threat. The U.S. will be Canada's main trading partner for a long time, and the relationship will be more important to us than it is to them.
And energy is a commodity. Companies will sell it where they can get the best price. The tactic could still be politically effective in the U.S., playing to twin public fears - energy dependence, and the potential emergence of China as a huge economic rival. Ottawa can reinforce its position by backing away from U.S. proposals for a continental energy strategy.
Critics complain Martin’s new militancy is mostly about helping the Liberals improve their prospects in the coming election.
But the pressure is still helpful. Coleman has refused to link energy policy and softwood, rejecting an NDP call to hold up the sale of Terasen Gas to U.S.-based Kinder Morgan.
He does support Martin’s tougher talk as a way of getting the Americans to pay attention.
Coleman is guarded about how he thinks the dispute can be resolved. Forest ministers from softwood provinces have been in discussions on a new strategy over the last two weeks, and government forestry officials from across the country met in Vancouver last week to work on the plan.
Coleman says he has spoken with federal International Trade Minister Jim Peterson, and expects more discussions this week.
It’s tough to be overly hopeful. After Martin raised softwood with George Bush in a phone call last week, the conversation drew a couple of questions at the daily White House press briefing. But it was the last item of 10 that were raised - after reporters asked what Bush thought about the Minutemen volunteer border patrols.
The softwood issue doesn’t matter much yet to most Americans. And it matters a lot to the lumber companies, who are prepared to cling to duties as long as possible. Each day means fatter profits. (Which they keep even if the U.S. ends up returning the $5 billion in duties so far.)
Canada does have a better chance now to reach a deal than it has since the dispute began.  
Martin is setting preconditions on any negotiations with the U.S., requiring the Americans to accept the NAFTA ruling and commit to returning the duty.
It’s a reasonable position. It’s better to stick with legal actions than accept a bad deal with long-term consequences.
Footnote: Coleman said Tuesday he welcomed this week’s Ottawa mission by the Coast Forest Products Association, which is seeking aid. Coleman acknowledged a “crisis” in the coastal industry, and said he’s asked the industry for proposals for an aid plan to include short and long-term measures.