Fly the flag high, Canada!
The economic stimulus bill passed by the U.S. of Representatives contains a so-called “Buy America” clause that is causing alarm in Canada and around the world.
The provision calls for the use of U.S.-made iron and steel in all infrastructure projects funded under the program. It could freeze out Canadian steel plants (even though they’re all foreign-owned) from bidding on these billions of dollars worth of projects.
The rest of the world would be affected, as well. That’s why diplomats and politicians gathered at Davos, Switzerland for the World Economic Forum are busy lobbying American policy-makers to back down from this regressive, protectionist move.
It all smacks of the dreaded Smoot-Hawley Act, the protectionist bill that clamped down on trade in the early 30s and helped make the Depression the disaster it was.
Canada’s international trade minister, Stockwell Day, says he”cautiously optimistic.”
Traditionally, Canada’s been a patsy for American trade policy. We’ve never really communicated agressively to the States how important Canada is. That’s one reason why most Americans are so ignorant about this c ountry.
There are very compelling reasons why Canada should fly its flag high in this controversy. We need to remind Americans (and that means everybody in the Congress and the media, too) that:
- Canada is the biggest customer the U.S. has. We’re currently buying more than $200 billion worth of stuff from the States every year. That means a lot of American jobs. And if Canada is hurt economically, those U.S. workers will feel it.
- Canada is the biggest supplier of oil to the United States. We ship the U.S. more than $300 billion in petroleum products annually, more than Saudi Arabia or any OPEC nation.
In other words, we make jobs and oil for the U.S., two desperately needed things for all Americans in the current crisis.
Then there’s all the other reasons why it’s in the interest of the United States that Canada do well. We’re a solid partner in North American defense, through NORAD which now has a “maritime” component and is of “indefinite duration.” U.S. companies have $289 billion invested in Canada. And Canada is the fifth largest foreign investor in American businsses.
Then, there’s the much talked of Security and Prosperity Partnership of North America, a scheme that would lock the U.S., Canada and Mexico into something close to that of the European Union.
Since the North American Free Trade Agreement (NAFTA) came into being in 1994, U.S.-Canada trade has grown by 265%. Our total two-way trade now exceeds $550 billion a year. About 300,000 people cross the border every day.
Much has been made of the threat by President Obama during the U.S. election campaign to renegotiate NAFTA. This shouldn’t scare Canada. NAFTA could do with some renegotiation. It didn’t help us stop the Americans from crippling our softwood lumber exports. And it wouldn’t hurt to make it clearer that culture is not to be ruled by trade laws.
The Harper government has a clear deadline for resolution of the Buy America decree. It’s February 19, when President Obama will be in Ottawa on his first trip outside the U.S. With everything we’ve got going for us, there’ll be no excuse for the Harperites if they can’t settle this one.