David J. Teece is an intellectual gun for hire. For $850-an-hour plus expenses, he’ll argue, if need be, that giving your money to your competitor will do you no harm.

Teece, holder of the Mitsubishi Bank Chair in International Business and Finance at the University of California at Berkeley, is an economist with enough academic honors to fill a column.

Luckily, the Berkeley Daily Planet condensed his credentials to one headline: “Big Building Backer, Academic Guru, Political Power Player and a Corporate Tycoon.”

Retained by the U.S. Department of Justice, Teece will aim his guns on Canadians. The designated corral is the U.S. Court of International Trade in New York; and the looming shootout is between Canadian lumbermen and the Bush administration.

The fight is worth $5 billion, an aggregate sum U.S. Customs collected as tariffs from Canadian softwood lumber exporters.

But dispute resolution panels of the North American Free Trade Agreement have ruled the tariffs illegal and the World Trade Organization declared the Byrd amendment, the American law enabling their collection, in conflict with international obligations binding the United States.

I’ll use the short form: Byrd. It says that tariffs collected from foreigners will be distributed to their American competitors in the same industry.

The WTO ruled on Byrd nearly four years ago and, reluctantly, the Bush administration and Congress conceded its illegality. But Byrd, they decided, would die slowly – not until 2007 – and its previous decisions would stand.

This twisted, laggard reasoning explains why the Justice Department is now fighting Canada and several Canadian companies in court for the $5 billion pot. That the tariffs are illegal under American law and WTO rules is, for the Bush administration, beside the point.

On arrival in Washington a year ago, the just-replaced Canadian ambassador in the United States Frank McKenna characterized the $5 billion stash as little more than an American heist.

But as Franklin Lavin, Under Secretary of Commerce for International Trade, told the Senate Finance Committee last October, the administration views the money “as a tool to try to get some kind of negotiated settlement” of the lumber dispute.

What nobody in Canada or the United States wants to talk about is the end result of negotiating a deal in a dispute already decided by NAFTA rulings that have the force of American law.

I’ll say what the result would be: the death of NAFTA. Maybe that’s what the Americans want and Canadians are gambling with. But if so, let’s be clear what we’re talking about.

On the side, here’s a bit relevant history. On Oct. 14, then-Prime Minister Paul Martin called President Bush. They had about 20 minutes on the phone and used up 15 minutes on NAFTA and lumber.

Days earlier, and apparently again over the phone, Martin hinted that if NAFTA’s Chapter 19 dispute settlement decisions on lumber are ignored in Washington then Canada might reconsider Chapter 6.

It requires that Canada – but not the third NAFTA partner, Mexico – share its oil and natural gas with the United States.

That petroleum warning brought Secretary of State Condoleezza Rice to Ottawa almost instantly. She had barely put her head down in Washington after an exhausting trip to Central Asia and an official announcement, dated Oct. 17, said she would be in Ottawa on Oct. 24.

Secretary Rice met with the prime minister. She was reminded the dispute had progressed beyond lumber to the future of NAFTA itself. Almost certainly on instruction from Bush, Rice assured Martin that the Commerce Department would adjust its tariff calculation in line with the NAFTA ruling and that America’s word on trade “is as good as gold.”

Fool’s gold, apparently. Not even Bush’s Commerce Department honored his wishes – and Rice’s assurances to Canada.

In real gold, David J. Teece will walk away with several pockets full of nuggets, in $850-an-hour installments, as he spins the Bush Justice Department’s court argument that Canadian lumber companies will suffer no pain by losing five billion greenbacks to their American competitors.

What happens to the money, to lumber and to NAFTA should become clearer when new Canadian Prime Minister Stephen Harper meets Bush – possibly even before their scheduled end of March NAFTA summit in Cancun, Mexico.