Milking scapegoats: Biden administration bows to demands to reopen hyped up attacks on Canadian dairy, lumber

OTTAWA—One of the reasons Donald Trump won the U.S. presidency in 2016 was his promise to “drain the swamp”—that is, reduce the immense power of influence-peddlers and lobbyists in Washington, D.C., whose efforts to promote the agendas of their single-interest patrons were seen to be consistently strangling action on behalf of the American public. In office, Trump flipped this notion, defining the “swamp” as U.S. officials who resisted his moves to maximize corporate America’s influence. This included a head-spinning, widespread practice of turning the regulation of business sectors over to the very lobbyists who were previously fighting to undermine the regulators. But over the years, Democrats have not been much, if any, better at defying pressure from the 12,000-strong K Street lobbying army. And the single-interest tail may be still wagging the national-interest dog when it comes to the Biden administration. This appeasement of powerful interest groups, as we saw again last week in the U.S. renewal of its 40-year attack on Canada’s softwood lumber exporters, has the benefit for U.S. administrations of mainly punishing American consumers, the least organized group in the U.S. economy. Besides, who cares about alienating Canada? Despite numerous rulings by trade panels over the decades in Canada’s favour in the softwood lumber dispute, the U.S. lumber coalition continues to disadvantage their competitors here by filing trade complaints arguing Canada unfairly subsidizes its forestry producers. The clout the U.S. industry maintains at the U.S. Commerce department can be seen by the fact that officials there announced a preliminary decision to double tariffs on Canadian softwood lumber imports at a time when the cost of wood in the U.S. has shot up 300 per cent as a result of the impact of COVID-19 on supply and demand in housing and reno markets. U.S. construction companies, who depend on Canadian lumber as a result of the inability of U.S. producers to meet domestic demand, called it blatant, ill-conceived protectionism. “The administration should be ashamed for casting its lot with special-interest groups and abandoning the interests of the American people,” Chuck Fowke, chairman of the National Association of Home Builders, said. “It knows that the lumber tariffs are nothing less than a tax on American home buyers, renters and businesses that rely on lumber products and they could not have come at a worse time.” Canada is also facing an escalation in the ongoing war of words with the U.S. on dairy. Last week, the Biden administration asked for a dispute settlement panel under the Canada-U.S.-Mexico (CUSMA) trade agreement to hear its allegations that U.S. farmers are being cheated out of their full benefits under the agreement. The context of this one can be found in the outsized clout farmers wield on the U.S. political scene. As for the specifics of the issue, the U.S. complaint about the way Canada is implementing tariff-rate quotas (TRQs) on certain dairy imports is largely symbolic. You won’t see a lot of facts and figures in the reams of agitprop from legislators and dairy lobbyists on the matter because the impact on U.S. exports or farmers is trivial amid $6.5 billion in annual U.S. dairy exports. Despite the Canadian dairy import quotas Americans complain about, the U.S. already runs a $650-million a year trade surplus in dairy with Canada. And the U.S. also limits its own dairy imports with quotas and tariffs so high that, leaving aside cheese, imported dairy goods hardly register in domestic U.S. trade tallies. But the dairy sector in the U.S. needs every possible dollar of export sales. Since 1992, dairy farms have dwindled from 130,000 to 31,000, with these operations subject to the same boom-and-bust overproduction distortions as other U.S. farmers, who now depend on US$20-billion annually in federal government payouts (last year it was $44-billion—or 40 per cent of all farm income—because of COVID supports and subsidies to offset the impact of Trump’s trade war with China). While the magnitude of the dairy issue the U.S. wants adjudicated under CUSMA is very minor in the scheme of things, focusing attention on Canada in the context of U.S. agricultural problems—what one Wisconsin farmer called “milking scapegoats”—is not likely to subside anytime soon. Biden’s choice for secretary of agriculture is Tom Vilsack, former president of the U.S. Dairy Export Council, the lobby group whose demands for action in retaliation for Canada’s allegedly unfair dairy practices put the TRQ issue on the government agenda in Washington. Vilsack said recently he wants Canada to fully honour both the letter and the spirit of the new CUSMA trade agreement negotiated under the Trump administration. Les Whittington is a regular columnist for The Hill Times. The Hill Times

Milking scapegoats: Biden administration bows to demands to reopen hyped up attacks on Canadian dairy, lumber

Democrats have not been much better at defying pressure from the 12,000-strong K Street lobbying army. And the single-interest tail may be still wagging the national-interest dog when it comes to Biden's administration.

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Milking scapegoats: Biden administration bows to demands to reopen hyped up attacks on Canadian dairy, lumber

Democrats have not been much better at defying pressure from the 12,000-strong K Street lobbying army. And the single-interest tail may be still wagging the national-interest dog when it comes to Biden's administration.

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