The North American Free Trade Agreement is a great game. Three teams – not two – take part, and despite claims to the contrary, there is overwhelming evidence that all the players – Mexico, Canada and the United States – are winning.

Two features make a game popular, successful and fun to play: rules and umpires.

But when one player uses his superior power to ignore the umpire and run roughshod over the rules, it can destroy the game. It also tempts the other players to pack up and go home, plus it serves as a cautionary tale for outsiders thinking about joining in.

Such is the case with NAFTA. This month, for the fifth time in 25 years, Canada won a legal victory over the United States in the long-festering dispute over its softwood lumber exports.

Softwood lumber isn’t the only issue that seems solution-resistant. One quickly thinks of Mexican avocados, Mexican sugar, international trucking, Canadian beef and wheat. Each involves NAFTA’s biggest player, yet Canada and Mexico seem to get along just fine. However, due to its size ($10 billion a year) and the softwood lumber dispute’s longevity, it stands as a classic example.

This time, an extraordinary challenge panel dismissed American claims that Canadian lumber is subsidized unfairly. The next step, in a rules-oriented game, would be for the United States to end its 21 percent import tariff and reimburse Canada’s lumber producers the $5 billion in duties charged for imports since 2002.

Don’t hold your breath.

In an eye-opening display of arrogance and unilateralism, the U.S trade office said, “We are, of course, disappointed with the (panel’s) decision, but it will have no impact on the anti-dumping and countervailing duty orders.”

The only legal recourse now available to the losers is a challenge of the NAFTA constitution, though the U.S. trade office is talking about a negotiated settlement.

That U.S. lumber interests have been backed by the U.S. trade representative’s office through successive administrations is a tribute to the power of the lumber lobby, the Coalition for Fair Lumber Prices. The coalition is dominated by two mega-producers, Georgia Pacific and International Paper.

Its power trumps that of the American Consumers for Affordable Homes, a lobby group that recognizes and laments the higher cost of already stratospheric home prices that result in part from the import tariff.

Behind this American intransigence in the face of overwhelming evidence that it’s flouting rules and ignoring purportedly “settled” trade disputes is a single lobby group – the lumber interests. Plus, members of Congress who support them, but for the lawmakers, it’s not about fair play – it’s about getting campaign contributions.

The Toronto Star summed it up in an editorial, “Protectionism First, Last and Always.” It said in part: “Like the Black Knight in ‘Monty Python and the Holy Grail’ (who insisted on fighting even after all his limbs had been lopped off), the American administration caved in to the likes of Olympia Snowe, the (Republican) senator out of Maine who insisted on fighting on.”

It’s consistent with the unilateralism that the Bush administration has followed since 2000 with the Kyoto Treaty, the United Nations, its Iraq policy and so on.

The broad lesson for trading nations is that the United States is divided into countless competing lobby groups, with producer lobbies usually winning over consumer groups.

When something like this happens, almost everybody loses. Canadian lumber producers lose money, U.S. home buyers pay more and NAFTA loses credibility while its future as a $600 billion-a-year trade treaty is jeopardized.

So does the Bush administration, whose rule-defying policy conflicts with its efforts to convince its trade partners to broaden NAFTA.

It also loses in its campaign to sell other players on the idea of joining a similar game called CAFTA (Central American Free Trade Agreement). What will these nations do when they see their putative partner ignoring rule interpretations it doesn’t like?

The only big winner is the U.S. lumber industry. It gains what is, in effect, a subsidy enabling it to add 21 percent to its products’ selling price. Smaller winners are the congressmen pandering to the lumber lobby in return for campaign contributions – and, of course, lawyers on both sides.

Last year, the National Hockey League found out what happens when neither players nor owners agree on how to divide the spoils. The 2004-2005 schedule was canceled, so there were no spoils at all.

That’s unlikely to happen with NAFTA, but it’s a shame when one player breaks the rules at will, depending on the good will of the others to let the game go on.