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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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The US government last week decided to impose new duties and anti-dumping penalties on Canadian softwood lumber imports. The US Commerce Department, reacting on complains from many American sawmills accused Canadian mills of unfair subsidizing. The new duties and anti-dumping measures will take effect in May if approved by the US International Trade Commission. Canada already has challenged the sanctions at the World Trade Organization (WTO) and through the North American Free Trade Agreement (NAFTA). These sanctions could push up the average price of the new houses in the US, say American and Canadian experts. What could be the outcome of this standoff if reason doesn't overcome the emotions from both sides?

The story began last year when some American sawmills accused their Canadian counterparts of receiving unfair state subsidies, which they say have ruined the American timber industry. The US government threatened to impose new duties on Canadian lumber if Canada doesn't stop these illegal practices. Ottawa denied the illegal subsidy allegations and accused the United States of trying to protect inefficient sawmills.

After months of talks far from cameras the two sides didn't reach a compromise in this trade dispute. In the last minute Ottawa refused to back the idea of temporary additional duties for its lumber export to the US. The result was that Washington decided to impose unilaterally the new duties. This measure will have a negative effect upon the whole Canadian timber industry but most of all on the businesses in the province of British Columbia on the Pacific coast.

The reaction these days in Canada is far from peaceful. The Industrial Wood and Allied Workers of Canada (IWA), which is faced with thousands of layoffs, called on Canadians to avoid US-owned retailers who do not take an active role in opposing the sanctions. In fact that means that calling for boycott on US stores in general isn't left for a distant future. At the same time the union again called Ottawa to pressure Washington by linking the lumber dispute with the larger amounts of oil and gas, which Canada is expected to supply to the United States in the future. On a press conference in Vancouver this week the IWA president Dave Haggard asked that if US aren't good neighbor why should Canada continue to be.

So many angry words have been said these days in Canada and so few wise words have been heard. It seems that after failing to protect the timber industry interests, Canadian government is trying to find the enemy where it can't be. Let's turn to the facts. Canada supplies about $6 billion worth, or one-third of the 55 billion board feet of softwood lumber used in the US annually. It's used mostly for housing construction. Homebuilders and experts both in the US and Canada argue that the new duties will increase the price of a new house by an average of $1,500. Why should US consumers pay more? Who wants to pay more if it can be done with less?

American public also should be informed that the new duties are in reality counterproductive. The first result will be that these penalties will reduce the import from Canada (bad for Canadians), but the second will be that the "missing" trees will have to be cut in the US (bad for US ecological balance). Ottawa is preparing to impose its own shipment taxes on raw logs so the US sawmills couldn't use the new duties for increasing the output. So who is winning? Nobody. Everyone is losing and the US consumers at the first place.

So what should be done? The first thing to be done is to calm down the game. Mutual blaming is good for the press but bad for the business. Second thing is to cancel the deadline of sanctions coming into effect. Trade talks can't be productive when the gun is pointed at your head. Third, US and Canada have to reach a compromise, nobody will be completely satisfied but there will be no trade war.

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