AS CANADA TRIES TO LESSEN ITS TRADE DEPENDENCE ON THE U.S., COMPANIES WITH OFFICES IN BOTH COUNTRIES MAY BE CAUGHT IN A LEGAL CATCH-22 BETWEEN THE TWO GOVERNMENTS OVER THE ISSUE OF TRADE WITH CUBA, SAID RICK DEARDEN, A NAFTA PANELIST AND PARTNER AT THE CANADIAN LAW FIRM OF GOWLING, STRATHY & HENDERSON, WHO SPOKE AT A PRESENTATION ON BUSINESS OPPORTUNITIES IN CANADA ON NOV. 21.

CANADA INTERPRETED THE U.S.’S HELMS-BURTON ACT, WHICH IS INTENDED TO DISCOURAGE FOREIGN INVESTMENT IN U.S. PROPERTIES EXPROPRIATED BY THE CUBAN GOVERNMENT, AS AN INFRINGEMENT ON ITS INDEPENDENCE. THE GOVERNMENT RETALIATED WITH A FOREIGN EXTRA-TERRITORIAL MEASURES ACT THAT CAN IMPOSE A FINE OF UP TO $1.5 MILLION ON CANADIAN FIRMS THAT STOP TRADE WITH CUBA BECAUSE OF THE U.S. LAW, SAID MR. DEARDEN.

THE U.S. AND CANADA ARE EACH OTHER’S LARGEST TRADING PARTNERS, SAID MR. DEARDEN, WITH 80% OF CANADA’S EXPORTS GOING ACROSS THE BORDER, WHILE ONLY 20% OF U.S. GOODS ARE SHIPPED NORTH.  HOWEVER, NOT ONLY U.S. AND CANADIAN COMPANIES MAY BE AFFECTED BY CLASHES BETWEEN THE TWO COUNTRIES, HE SAID.

FOR INSTANCE, SAID MR. DEARDEN, JAPAN-BASED HONDA, WHICH EXPORTS CARS FROM CANADA TO THE U.S., WAS ONCE FACED WITH A $20 MILLION FINE BECAUSE BOTH SIDES HAD DIFFERENT INTERPRETATIONS OF THE RULES OF ORIGIN UNDER NAFTA.  THE MATTER WAS LATER ARBITRATED BY A NAFTA PANEL, AND THE FINE WAS REMOVED, HE ADDED.

ADDITIONAL PROBLEMS HAVE OCCURRED OVER ISSUES RANGING FROM PROTECTION FOR CULTURAL INDUSTRIES TO U.S. RULES PROTECTING DOLPHINS FROM TUNA NETS, HE SAID.

TO BOLSTER CANADA’S SELF-RELIANCE, THE WORLD TRADE ORGANIZATION HAS RECOMMENDED THAT IT LOOK FOR NEW TRADING PARTNERS, AND INCREASED TRADE WITH MEXICO AND THE RECENT FREE TRADE AGREEMENT WITH CHILE, WHICH IS GENERALLY REGARDED AS A BRIDGE TO ADMISSION TO NAFTA FOR CHILE, ARE STEPS IN THAT DIRECTION, HE SAID.

THE CANADIAN GOVERNMENT IS ALSO ENCOURAGING INITIATIVES TO THE REST OF LATIN AMERICA AND ASIA, ADDED MR. DEARDEN.

FOR MORE INFORMATION ABOUT THIS SEMINAR, WHICH WAS HELD AT THE WORLD TRADE CENTER-ATLANTA AND FEATURED THREE ADDITIONAL SPEAKERS FROM GOWLING, STRATHY AND HENDERSON, CALL MARY LEE GILKEY AT THE CANADIAN CONSULATE GENERAL AT (404) 532-2011; FAX (404) 532-2050.

BY  BRIANA  PEHLMAN    

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