From: gld@cunixb.cc.columbia.edu (Gary L Dare)
Subject: Re: US-Canada Beer Dispute ... I thought it was over?
Reply-To: gld@cunixb.cc.columbia.edu (Gary L Dare)
Organization: Curious Goods (formerly Louis Vendredi Antiques)
Date: Wed, 29 Jul 1992 04:11:01 GMT

marc@meadow.UUCP (Marc Riehm) writes:
>golchowy@alchemy.chem.utoronto.ca (Gerald Olchowy) writes:
>[re free trade]
>>if the GATT rules, or the FTA dispute settlement mechanism are 
>>followed through to the bitter time-consuming end, we will win 
>>most of the current cases.
>>
>>In the current beer dispute, the US is violating the GATT.
>
>No, it is _we_ who have been protecting our beer industry for decades.  
>GATT ruled against Canada, and ...

No, Marc, you're both right; there are two separate beer trade events
that you guys are talking about.

There have been federal and regional first ministers conferences that
have brought out agreements to phase out protectionist provincial
trade legislation ...  The most notable domestic trade liberalization
has been in beer ...  Moosehead is now building its own distribution
in every other province outside of its home, New Brunswick.

Liberalization of the domestic beer industry was the most obvious
necessity, and was necessary to comply with an old GATT ruling that
went against Canada a FEW YEARS ago.  The Americans said "Enough's
enough already!" this past spring due to Canadian foot-dragging and
the April agreement (let's call that Beer Wars I, or BW I for short)
was the result of all that -- case closed.

A side effect of BW I is that follow-up complaints to GATT by the U.S.
about Canadian beer-dumping backfired, as a second GATT ruling which
agreed with their case for access (under the first, old ruling) also
agreed with Canadian arguments that brought down American local tax
subsidies (to Busch for one) and state shipping restrictions that kept
out other beer brands ...  instead of Canada going through numerous
local American court challenges leading up to the Supreme Court,
Washington inadvertently brought down those laws from the top down by
enforcement of foreign treaties under the American Constitution ...

Labatt and Molson are now consolidating their plants, but have taken
advantage of the recent US-Canada liberalization (due to both GATT and
recent Washington complaints in BW I) by turning some plants into
domestic-only production and others export-only.  A couple of plants
have closed 'cos they're too small, and the rest have cranked up to
full capacity.  Ironically, after the April agreement and a retreat on
the dumping charges by the U.S., Labatt and Molson announced that the
price of their American product will go down since their situation has
liberalized south of the border ...

>then Bob Rae pulled an underhanded trick (the so-called "environmental" 
>tax) to continue to protect the Ontario market against cheap American
>beer.  Perhaps the U.S. is violating GATT, but we certainly provoked 
>them into doing so.  I don't blame them in the least.

The current dispute, BW II, focuses on Stroh's and Heilemann's brands.
Coors, Busch (Bud) and Miller have contracts with Labatt and Molson to
supply the Canadian market and some offshore markets like the British
Commonwealth Caribbeans.  An interesting note on your comment about
Bob Rae's move (disclaimer: I'm a Liberal-voting free marketeer Red
Tory) is that Quebec also imposes warehousing and environmental tax
charges on these very same U.S. breweries [source: UPI Clarinet], so I
wonder if there isn't anything ideological involved (red commie hordes
at Queen's Park vs. pro-business-but-state-enterprise, pro-federalist-
but-quite-nationalist regime on Grande Alle'e ...)  on the part of
Washington.  As bogus as you might feel that they are, the Canadian
federal government believes enough in their legitimacy that they're
determined to hold that ball and run with it all the way to GATT
(which the U.S. has declared they will not obligate themselves to in
this case, much in the manner of exempting themselves from the World
Court decision mining the Nicaraguan harbours (-;).  [source: New York
Times; joke: moi]

Now, I don't know about the rest of you folks but I'd think that the
prime champion of GATT for ~50 years suddenly choosing not to oblige
itself to it ... well, I get a sick feeling in my stomach.  Mulroney
and his gang would probably have been happy to let Rae hang out and
dry on this if certain basic principles weren't involved, since Bri
is hanging his hat on liberalized trade based on civilized accords.

>... and I'm hoping that the same competitive forces will eventually 
>force other sectors of our economy to change (whaddya bet GATT will 
>eventually rule against the marketing boards?).

Even from following the latest Uruguay GATT (merry-go-)round here in
the U.S., I'm aware that Ottawa knows that the marketing boards must
go on the block.  There were domestic protests, from what I read.

>I would be willing to bet that, ignoring trading between members of 
>blocks such as the EEC, the U.S. borders are among the most open in 
>the world.

This has been debunked on American-dominated politics-chat groups
like Talk.politics.misc by "liberals" and libertarians, with some
numbers to back it up.  Interested readers can do a search on the
appropriate buffers with their local newsreader ... the subject
keeps coming around-and-around ...

gld
--
~~~~~~~~~~~~~~~~~~~~~~~~ Je me souviens ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Gary L. Dare				Elections 1992-93:
> gld@cunixD.cc.columbia.EDU		* Jean Chretien (Canada)
> gld@cunixc.BITNET			* Perot^H^H^H^H^H Elvis! (USA)