Let me now make a fool of myself by weighing in on a topic I don’t much understand. Again.

We’re hearing, for the first time in a long time, the first whispers of a possible detente and resolution in the Canada-US softwood lumber dispute. The story so far has featured a mitigated series of wins for Canada in trade tribunals and courts and the steadfast refusal of the US to budge on the topic, fueld by a strong American logging lobby and quite possibly a general lack of giving a damn on the part of the American people. The Canadian logging lobby, and the residents of the many Canadian northern towns who depend on the logging industry for their economic well-being, would love to see and end to American tarrifs on Canadian wood. In turn, the American building industry would probably be happy to see a dip of timber prices, given that something like a third of the softwood used in the US construction industry comes from Canada. Especially given that their will probably be something of a run on timber as Katrina rebuilding ramps up. If a deal to end the stand-off was reached between Bush and Harper, and that deal met all of the specifications of the Canada-friendly trade resolutions, it could also see ‘Canada’ getting back billions of dollars of previously-imposed tariffs from the American government.

Except except except. And here’s where my knowledge gets especially fuzzy. As far as I know, the American objection to the Canadian logging industry, the objection which led them to impose the import tariffs in the first place, is that the Canadian logging companies are in effect subsidized by the Canadian government because of the ridiculously low stumpage fees that they are required to pay in return for cutting on public (“Crown”) lands. And as far as I know, the Americans are right: Canadian logging companies do pay ridiculously low stumpage fees in return for clear-cutting our lumber and selling it in raw form to foreign countries. It’s a tragedy.

In effect, this dispute is another face on the central problem with free trade agreements: they hamstring the ability of governments to effectively regulate the worst excesses of companies within their own borders. This is a twist: in this case the American government has been trying to pressure the Canadian government into regulating Canadian and transnational corporations within Canadian borders, instead of the usual issue of national governments trying to regulate internally, but as usual, the effect of the trade courts has been to side with the companies and against regulation. In this instance, the Canadian public and government has come out looking like the David to the American goliath. But I think that if the Canadian public knew the story a little better, they would see the Canadian logging industry as the goliath, and the American logging industry as the other Goliath, and themselves as the David, and they’d spot that they were the ones getting screwed by any deal that lets logging companies go on cutting their trees on their lands without having to give anything much back in return.

The irony is that if “Canada” does get those billions in tariffs back from the US, it won’t be going to Canadians. It will be going to logging companies, Canadian and otherwise, to boost their financial statements and fatten them up for more cutting operations. Hooray.