A few points on this one:
1. Softwood lumber is not a minor trade irritant. More than $3 billion in illegally collected duties now sits in the U.S. treasury, having been collected over the last 2+ years through tariffs that have been shown by every dispute settlement panel, time and time again, to be completely unjustified. The money continues to accumulate at a rate of $150 million a month. It is, by far, the biggest bilateral trade dispute in the world. If the duties don't survive the NAFTA appeals (and so far the U.S. is losing virtually every battle) the money is supposed to come back to Canada.
2. Baucus's new bill promises to distribute that illegally-collected money among the US producers who made the complaint before the dispute settlements process has been completed. That's out and out theft, and it contravenes not only U.S. law but is in violation of both WTO and NAFTA rules that the U.S. is committed to abide by. The Byrd Amendment that allows for the disbursement was itself declared illegal by the WTO more than a year ago -- but it has yet to be repealed.
3. Canada and the US signed the first FTA (morphing into NAFTA when Mexico came on board) specifically to put an end to a string of bizarre decisions by the highly-politicized trade tribunals, aka kangaroo courts, in both countries. The dispute settlement mechanism was the answer. The problem has been that Canada (and Mexico) win more than 90% of the disputes. Rather than have a hard look at how unfairly their own trade tribunals function, the US blames NAFTA/WTO/Canada/Europe/communists or the man in the moon -- whoever is the handiest target. As a result, the U.S. does everything in its power to delay the ultimate application of NAFTA (and WTO) decisions not favourable to them.
3. Here's the amazing thing that very few people understand. These NAFTA dispute settlement panels (that keep overturning anti-dumping and countervailing duties on Canadian lumber) have only one very narrow mandate -- to determine whether or not U.S. trade rulings comply with U.S. law. In other words, these panels (the members are U.S., Canadian and Mexican trade experts) are throwing U.S. trade rulings out BECAUSE THEY DON'T COMPLY WITH U.S. LAW
! Not Canadian law, not Mexican law, but U.S. law.
Bottom line here -- the U.S. willingly signed on to FTA/NAFTA and the WTO. Hell, the U.S. was the lead nation in developing the WTO. The whole idea is to conduct trade through rules-based systems that everyone agrees on. To do that everyone (including the U.S.) has to sacrifice some soveriegnty. That means you accept the decisions that go against you as well as the ones that go for you.
NAFTA, overall, has been of great benefit to both Canada and the U.S. Mexico has benefitted to a lesser extent so far. But if the U.S. continues to flout its own laws, completely undermining the foundations of the agreement, it will die. That will be bad news for all three countries. And if you think it doesn't matter to the U.S. -- remember that one of the provisions of NAFTA requires Canada to participate fully in a continental energy market, providing oil, gas and electricity at market prices. One of the rules is that Canada can't turn off the tap. If NAFTA dies, so does that agreement.
Never let the facts get in the way of a good story.