Editorial: Democrat-led Senate not good news

Passing of Senate control to the Democrats in the U.S. elections doe s not augur well for Canada’s free trade initiatives in general, nor for free trade as it will affect the Canadian mining industry in particular.

It will do nothing to stem an already-rising tide of protectionism south of the border. In fact, the Democrats are seen to be more protectionist-minded than their Republican counterparts, and it seems likely, having won their Senate majority, they will be pushing hard for passage of a strongly protectionist trade bill adopted earlier this year by the House of Representatives.

Even had the Republicans won the day, it’s probable the reconvened Senate would still be in a protectionist mood. Witness such recent manifestations of that mood as the surcharge, small though it is, on all Canadian imports, and the imposition of a 15% duty on Canadian softwood lumber.

And even though there have, as yet, been no such specific moves against metals exports from Canada to the U.S. (our mining industry now exports about 80% of its production, and of this about 60% goes to the U.S.) there have been plenty of signs that there might be. Free trade (freer trade) with the U.S. remains an important item on the Canadian industry’s agenda and, as Mining Association of Canada’s managing director George Miller puts it, the industry has lost none of its enthusiasm for a free trade agreement.

There has hardly been a time in the past 10 years or so, in fact, says Mr Miller, when some Canadian-produced metal has not been under U.S. scrutiny. There are threatening signs right now, for instance, he notes, concerning such Canadian-exported products as uranium, potash, and zinc.

Potash, for example, has been under threat from an anti- dumping action and in the case of zinc, the independent Zinc Alloyers Association in the U.S. has made representations to the office of the U.S. Trade Representative urging that zinc alloys (in which the U.S. enjoys a 19% tariff on zinc alloys from Canada) be taken off the bargaining table at trade talks.

We could indeed be heading for tougher trade times with the new political hue in the U.S. Senate, and the mining industry here will need to keep its head up all the way. While, for instance, as Mr Miller says, nobody is yet contemplating even in the worst scenario, any such action as retaliatory moves against metals brought into Canada from U.S. sources, it could help in the present situation if the Canadian industry, collectively and individually, were to appear more often in Washington to plead its case.

We can hope that the Americans don’t turn any more inward than they already have, but we shouldn’t bet on it.