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Energy sector resents being used as a bargaining chip in trade dispute Canada’s natural resources minister revives case for ending energy cooperation with the United States; draws wrath of industry, Alberta government Gary Park PNA Canadian Correspondent
Veiled threats to end cooperation with the United States in the energy sector, including the routing of a gas pipeline from Alaska through Canada, brought a swift reaction from those opposed to linking energy and the raging Canada-U.S. softwood dispute.As he did last summer, Natural Resources Minister Herb Dhaliwal raised the possibility of playing hardball with the Americans by trying to leverage their dependence on Canadian oil and gas.
While Dhaliwal, who represents a British Columbia riding in Parliament, didn’t go as far as suggesting Canada should hold energy sales hostage, he pointed to the Alaska Highway gas pipeline project as an area where the United States needs Canadian co-operation.
John Reynolds, another Member of Parliament from British Columbia and interim leader of the opposition Alliance party, without calling for retaliation, said Canada shouldn’t go out of its way to help the United States develop northern pipelines. Government bristles Even the hint of such action had the Alberta government and the petroleum industry bristling.
“The solution to a trade war is not to build a bigger trade war,” said Alberta Energy Minister Murray Smith. “Let’s not link other products into this. I’m sure the prime minister knows what damage can happen if this escalates.”
Greg Stringham, vice president of markets and fiscal policy for the Canadian Association of Petroleum Producers, warned that “tying energy (to the softwood dispute) would likely result in a back-and-forth battle that would damage trade in other areas as well.”
Smith pointed out that 85 percent of Canada exports go to the United States and 73 percent of Canada’s imports are from the United States. “So a trade war would hurt us more than it would hurt them.”
Cooler heads also prevailed in the federal cabinet. Link a non-starter Trade Minister Pierre Pettigrew, who is the lead softwood negotiator, said linking trade issues was a non-starter because of what Canada could lose. at a time when it has a C$90 billion annual trade surplus with the United States, including C$40 billion in oil and gas exports last year.
Deputy Prime Minister John Manley dismissed any talk of reconsidering co-operation in other trade areas.
But he also said the softwood fight is “far from over,” with Canada already launching actions before the World Trade Organization and under the North American Free Trade Agreement, as well as continuing to pressure President George W. Bush.
Among the other voices, Gerry Shannon, a former Canadian ambassador to the WTO and now a trade consultant, said “retaliation is a mug’s game.”
Paul Cellucci, the U.S. Ambassador to Canada, cautioned Canada against lashing out.
“Our trade relationship is mutually beneficial so it makes no sense to try to hurt other sectors,” he said. “I think there’s frustration on both sides. There’s a little bit of steam that has to be let out here.” Alaska Senator John Torgerson was reported by The Canadian Press as saying that Canada risked thousands of jobs and huge economic opportunities if it held the Alaska Highway pipeline to ransom in the dispute. Fury grows But the only response in British Columbia, where forestry job losses are forecast to double to 30,000, was one of growing fury.
Mike de Jong, the province’s outspoken forests minister, labeled the United States a “hostile foreign power” attacking British Columbia logging communities.
British Columbia Premier Gordon Campbell called for a stakeholder summit of governments, forest companies and unions, a move one industry spokesman said would be a good first step in persuading Prime Minister Jean Chretien to “get tough with the U.S. government.”
John Allan, president of the British Columbia Lumber Trade Council, said “strong political action ... is the only language the Americans understand.”
The International Woodworkers of America is urging a boycott in British Columbia of U.S.-owned store such as Wal-Mart and The Gap.
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