Gilbert Gagné

The US–Canada softwood lumber dispute and the WTO definition of subsidy

In the softwood lumber dispute, the United States argues that Canadas forestry practices, especially the fees charged by provincial governments to private firms to harvest trees on public lands (stumpage rights), result in undue subsidization of Canadian lumber. Within the World Trade Organization, the concept of subsidy is defined as a ‘government financial contribution’ that confers a ‘benefit’ on firms and that is ‘specific’. In US–Softwood Lumber IV, the WTO authorities ruled that stumpage rights were specific and constituted a financial contribution through the provision of a good (timber). However, in order to demonstrate whether and to what extent these rights confer a benefit on lumber producers, the United States still has to ensure that its methodology to assess the ‘adequacy of remuneration’ is compatible with WTO provisions and to conduct a satisfactory ‘pass-through’ analysis of the alleged input stumpage subsidy to unrelated downstream lumber producers.

What Can Best Explain the Prevalence of Bilateralism in the Investment Regime

This article seeks to explain a key characteristic of the investment regime. Indeed, a closer look at the regime’s treaties clearly reveals a “lateralism paradox.” On the one hand, most of the attempts to conclude a comprehensive multilateral agreement on the protection of foreign investment have failed (Schrijver 2001: 21–25; Young and Tavares 2004: 2). Although some multilateral investment instruments exist, none of these provides compulsory rules for the liberalization and protection of investment as does Chapter 11 of the North American Free Trade Agreement (NAFTA), effective since 1994. This is not because there have been no attempts. The investment chapter of the 1948 Havana Charter, the 1959 AbsShawcross Convention on Investments Abroad, the 1967 Organization for Economic Cooperation and Development (OECD) Convention on the Protection of Foreign Property, and the 1998 Multilateral Agreement on Investment (MAI) were never adopted. The launch of investment negotiations was initially on the Doha agenda of the World Trade Organization (WTO), but a package deal adopted in July 2004 provided that investment issues were not to be negotiated in the Doha Round of trade negotiations. On the other hand, the very same countries that have resisted any multilateral agreement on investment have signed bilateral investment treaties (BITs). Today, there are more than 2,400 BITs involving more than 175 countries (United Na-

The Softwood Lumber Dispute and US Allegations of Improper NAFTA Panel Review

The dispute over Canadian exports of softwood lumber products to the United States (US) has lasted since 1982 and, so far, has gone through four episodes of litigation. In Lumber IV, the US International Trade Commission (ITC) determined that the US softwood lumber industry was threatened with material injury by reason of dumped and subsidized lumber from Canada. Under the North American Free Trade Agreement (NAFTA), a binational panel concluded, however, that there was no such evidence and directed the ITC to reverse its finding. In its resort to the Extraordinary Challenge Procedure, the US alleged that the injury panel had misapplied the US standard of review. In fact, allegations of improper NAFTA panel review were used by the US in order to justify its non-compliance with adverse binding decisions.

Emerging Powers in Global Governance: Lessons from the Heiligendamm Process

This book was co-published with the Centre for International Governance Innovation (CIGI), a Canadian think tank in the field of global governance, also based in Waterloo, Ontario. The book deals with the role of big emerging powers in the workings of the G8. The latter is the forum grouping the major industrialized countries: Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the more recently admitted Russia. In G8 parlance, the rising powers discussed in this edited book have been termed either the Outreach Five (O5) or dialogue partners, while they have preferred being referred to as the G5. Although not officially endorsed, the book favours the B(R)ICSAM terminology, standing for Brazil, Russia, India, China, South Africa, and Mexico, with the “R” in brackets as Russia is already a G8 member. If the G8 has been considered an effective centre of global governance, it is ill equipped to tackle emerging global problems, such as climate change. To quote Andrew Cooper, the G8 club has been confronted with “an accentuated double crisis of legitimacy and efficiency” (p. 2). The G8, therefore, has struggled to develop an effective strategy of engaging big emerging powers from the South. Former Canadian Prime Minister Paul Martin had proposed a new Leaders’ 20 forum, to replicate and complement the initiative of the G20 finance ministers and central bank governors, in place since 1999. For those interested in the mechanisms of global governance, as these arrangements have been primarily used to cope with the recent world financial and economic crisis, they more readily come to mind than the G8. Incidentally, the G5 countries have had a leading role within the G20. In this respect, not only was the book published a little before the outset of the crisis, but some G8 states have sought less ambitious changes. Among these, one consists of picking and leaving out specific countries on an ad hoc basis, an option favoured by the United States and Japan. Some other G8 members, such as France, the United Kingdom, and Russia, are favourable to a formal enlargement of the G8 forum. Italy and Canada have not voiced an opinion on the issue. In whatever case, the main source of controversy is China, seen as either too big or too different. In this regard, the Heiligendamm Process constitutes a middle path. It was established in 2007 by Germany, then host of the G8 summit. It was conceived as an outreach effort of the leading industrial states towards those five emerging powers, so as to provide a new framework

The Canada‐US border and culture: How to ensure Canadian cultural sovereignty

Present means of communication, emerging technologies, and the specifics of cultural goods and services tend to confer on the Canada‐US border a virtual character. Such technological developments, increasing economic continentalism, and the application of existing international trade rules, all combine to make more problematic the preservation of a distinctive Canadian culture. What is at stake is the maintenance of a distinctive political community on the North American continent. A fundamental challenge is to preserve Canadian cultural sovereignty, understood as the ability to promote cultural industries. An exemption of culture from the purview of the North American free trade regime has proved inadequate. Canada is ever more dependent on the United States which has used its leverage to oppose cultural policies. American interests have also been reflected in multilateral trade provisions that do not allow for exceptions in favour of national cultural policies. Rather than the exclusion of culture from international economic regimes, what are required are compromises that would ensure the conditions for effective cultural policies. The instruments of Canadas cultural policy may have to be revised accordingly. As the cultural community has tended to be inward looking and to disregard the overall imperatives of Canadian foreign policy, a further challenge in terms of policy setting is to ensure a better coordination of the views of the cultural and diplomatic communities.

The World Trade Organization and Preferential Trade Agreements: The Case of Cultural Goods and Services

Two contrasting perspectives on the treatment of cultural goods and services in international trade law have proved ever more salient since the early 1990s and in light of the digital revolution. For countries such as the United States, cultural goods and services should be considered like any other product, whereas for others, Canada and France in particular, they should be subject to an exception to the principles and rules of economic liberalization. Between these extreme positions, most countries seem favorable to a more or less pronounced form of cultural exception. In view of the difficulties in expanding liberalization commitments on cultural products at the multilateral level and the stalemate in the Doha Round, the main actors in the trade and culture debate, that is, Canada, the European Union (EU), and the United States, have each concluded their own preferential trade agreements (PTAs) with many countries throughout the world.