On Wednesday, August 10th, the North American Free Trade Agreement (NAFTA) dispute resolution panel ruled in favour of Canada on the matter of Canadian exports of softwood lumber to the United States. The American reaction was ‘so what’ NAFTA cannot over-ride American law.

In the same week, Prime Minister Paul Martin advised the Queen to appoint Michaelle Jean, a Haitian born, French Canadian from Montreal to the position of Queen’s representative and Governor General of Canada.

Earlier this week, the media was feeding on the notion that the Queen’s new representative and her husband Jean-Daniel Lafond may have socialized with known separatists in Quebec and that if they did so, they may not be committed to the future of Canada.

The frenzy forced Ms. Jean to release a written statement confirming her commitment to Canada. How sad is that, in a country which prides itself in a justice system espousing innocence until proven guilty. Most Quebecers have socialized with a separatist at least once in their lifetime. Nearly half of them live with a separatist. That does not make them a separatist.

Also in the past weeks, the federal Minister of Indian & Northern Affairs floated the possibility that $200 million could flow to New Brunswick to support a regional immigration program. A national poll suggests that the economic success of immigrants in Canada is often determined by their country or continent of origin.

Should a New Brunswick immigration strategy be racially profiled?

No, but one might interpret the poll to suggest that immigration is a bit of a crap-shoot and the $200 million might better be invested in projects that create high-paying jobs. Good long-term jobs would attract and keep quality people. Look at what’s happening in Alberta.

The notion of immigration as a development strategy is further muddied by the Saint John journalist who suggested last week that people from Ontario are not qualified to be the Government of Canada’s Consul General to Boston because they are not Maritimers. Wow, that’s a great way to launch an immigration strategy.

To top it off, one of our local newspapers got its knickers in a knot when the Globe & Mail made the mistake of naming Moncton as the Capital of New Brunswick. The newspaper headline attributed the mistake to the arrogance of "Upper Canadians". That’s a bit of an over-reaction. I would have thought that Moncton as the Capital would be a good thing.

So which of these breathtaking events will have a lasting impact on the future of Atlantic Canada? The Queen’s appointment of a French Canadian as Governor General may prove significant if reaction to it flames separatist feelings in Quebec but otherwise it will die a natural media death. My vote goes to the NAFTA ruling.

The intent of NAFTA was to facilitate free trade between Canada, the United States and Mexico. To a large extent it has worked. NAFTA has enabled both Canada and Mexico to increase their exports to the United States: Canadian manufacturers now send more than half their production to the U.S. while Canada is the most important destination for the export of U.S. merchandise from 39 of the 50 U.S. states.

Section A, Article 301 of the NAFT Agreement suggests that each party to the Agreement should accord national treatment to the goods of another party in accordance with Article III of the international General Agreement on Tariffs and Trade (GATT). That means that a state or province must treat the goods and services of its NAFTA partners in a manner that is no less favorable than the most favorable treatment accorded to competitive goods of its own. That seems fair but it doses not describe U.S. treatment of Canadian softwood lumber.

The export of softwood lumber is important to the Canadian economy and particularly important to the Province of New Brunswick. Its wood is currently exempt from U.S. import duties. The Bush Administration says the NAFTA ruling is inconsequential and that it has no intention of scrapping the softwood lumber duties or returning those that have been illegally collected since 2002 (an estimated $5 billion).

The new U.S. Ambassador to Canada, David Wilkins defends the Administration’s reaction. That’s not surprising, considering that he’s a former Bush fund-raiser and was South Carolina Campaign Chairman for George W. Bush in the 2000 and 2004 elections.

When Canada’s International Trade Minister Jim Peterson demanded that Washington concede defeat and return the $5 billion in anti-dumping duties, the U.S. refused, saying the NAFTA ruling is not the end of the matter because it does not deal with a 2004 decision from the U.S.-based International Trade Commission. That decision supported the American case, although some believe it has been trumped by the NAFTA decision.

The U.S. response to the NAFTA ruling has caused Canada to suspend softwood negotiations with the United States. Peterson has questioned the U.S. commitment to NAFTA and is seeking permission from the World Trade Organization to implement punitive measures against the Americans'. If these reactions and counter-actions continue, they could lead to the total closure of the U.S. border to Canadian softwood lumber including lumber harvested in New Brunswick. That would hurt.

It’s time to chill out.

Let’s give the Americans the benefit of the doubt and assume they want to negotiate their way out of the softwood lumber situation. By raising the Trade Commission decision in their response to NAFTA, they hold out the prospect of a negotiated settlement.

Canada’s Ambassador to the United States should jump at it. He’s an excellent communicator. He’s blunt. He’s tough and he’s a proven deal-maker.

That may be what we need to resolve this crisis.