Mining industry backs spirit of free trade deal

While the terms of the new Canada, U.S. Free Trade agreement are still shrouded in generalities, a number of top mining officials were expressing guarded optimism regarding its effect on the industry.

“The mining industry was strongly in favor of an agreement, so we are pleased that the talks have come this far”, said Mining Association of Canada Chairman Walter Curlook. “We understand that the Kerrigan ruling which forbade U.S. domestic utilities operators from using foreign enrichment material in their power reactors, will be put aside,” he said.

Like the 85.2% duties on foreign potash which sparked retaliatory measures from Saskatchewan potash producers, the Kerrigan ruling was considered a major blow to Canada’s uranium industry.

“To prevent this from occurring again, Canada had asked for some kind of binding arbitration to settle disputes and it looks like we will get a good measure of that,” said Mr Curlook who hopes that other countries will look at the agreement which could spill over into a much broader free trade area.

“It’s not a perfect agreement but it’s better than nothing,” said Falconbridge Ltd. Chairman William James. Like a number of his mining colleagues, Mr James says free trade will benefit the mining industry but he has reservations about the dispute settlement mechanism. While any tribuneral committee will consist of both Americans and Canadians, he says the fact that it will be governed under U.S. laws means that it could favour U.S. producers.

“Even though an American producer is getting larger subsidies than a Canadian competitor, that might not be taken into account,” he said.

While he supports the general thrust of the agreement, Ontario Mining Association President Pat Reid is waiting for the structure of the controversial dispute settlement mechanism to be outlined.

“The problem with the new free trade deal is that we still don’t know what it really means,” he said.

According to recent reports, a Canada-U.S. panel will issue binding judgments on disputes from either side of the border but Mr Reid says he is not convinced that the panel will have the authority to settle all disputes.

“If we are still at the mercy of disputes and their interpretation then the two countries will have to sit down and rethink the whole thing.”

The oma president says the size of the U.S. deficit means Canadians don’t know what impact the agreement will have on the short term. “But the United States is still our biggest trading partner and the agreement could be an example for other countries,” he said.