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Off The Fence - Buy American policies are no reason to expand Canada –U.S. free trade
Susan Thompson
for Smoky River Express
Canada’s premiers met in Regina a couple of weeks ago for their annual conference, and one of the very few things the premiers were able to agree on was that they want Canadian exemptions from Buy American polices.
Under Buy American rules, U.S. jurisdictions have the right to choose to exclude Canadian manufacturers, unions and municipalities when procuring goods such as steel and other materials to be used in public works projects funded by the $787 billion in stimulus cash the U.S. government has been doling out to try to save their economy.
That’s upsetting industries in Canada who want to get in on the business generated by the U.S. cash handouts themselves. So Harper and International Trade Minister Stockwell Day have proposed that provinces voluntarily tie their provincial and municipal procurement processes to NAFTA rules about non-discrimination against U.S. companies. What that means is the provinces would promise to treat companies from the States the same as if they were local companies when buying goods and services.
What we’re really talking about then is a new, more extensive Canada-U.S. free trade deal, to add to NAFTA and NAFTA-plus agreements (such as the Security and Prosperity Partnership or SPP) already in place. NAFTA would apply not only to the level of the federal government, but provincial and municipal governments as well.
The premiers also apparently think this is a good idea. But is it?
My opinion is that no, it isn’t.
There’s a pretty good argument to be made that NAFTA hasn’t exactly been a good deal for Canada. Softwood lumber, anyone? So why expand it further and possibly create more softwood lumber-type disputes in our provinces, counties and towns?
That would just give large unelected corporations even more influence on public policy than they already have, potentially letting corporations have more say in our small local economies than we do. The problems with that might outweigh any benefits.
I also wonder if Buy American policies are as big of a problem as they’re being made out to be by Harper and our industry groups. According to them, Buy American is suddenly the big scary boogeyman of protectionism. But as President Obama pointed out last week at a Security and Prosperity Partnership summit meeting with Harper and Mexican President Felipe Calderon, Buy American policies only apply to specific parts of the stimulus package and so are hardly part of some massive new U.S. move to become protectionist. Obama said that Buy American policies “in no way” threaten trade between our countries, and I agree. The thing is, Buy American policies aren’t new. They’re been around for the past 75 years. If they were really so damaging, I think we’d have noticed before now.
Unfortunately for Harper and our premiers, Buy American policies also tend to be incredibly popular in the U.S., which is why the States didn’t get rid of them back when the Multilateral Agreement on Investment (MAI) was being negotiated in the 90’s. The U.S. might never agree to get rid of them. Obama still hasn’t done it despite Harper bringing it up every time they meet, and time is running out since the stimulus package doesn’t apply forever. If Obama continues to say no, then our provinces will have given up control of their own local economies for nothing. That’s another reason right there not to do it.
(By the way, there might be a hidden reason for the new push by Harper and our premiers to expand NAFTA rules to the sub-national level. Canada has been in talks to join the European Union, and one of the EU’s requirements to join is to liberalize procurement and regulatory powers at the provincial and municipal levels. That’s got nothing to do with Buy American policies, but Buy American policies might be a convenient excuse to bring in an otherwise unpopular change to please the E.U.)
Bottom line, wouldn’t it simply make more sense to create more public works projects here in Canada, and attach some Buy Canadian rules to stimulus spending of our own? If the States is doing it and it’s helping, maybe we should spend less time worrying about how to get at their stimulus money and more time worrying about getting at some of our own.
The Federation of Canadian Municipalities has already voted to bring in their own “buy local” policies if the Buy American restrictions aren’t lifted by fall, and if you ask me, that’s a great idea. We just need to get Ottawa, and our premiers, on board.
After all, what would have a bigger impact on a town like Falher where business has slowed down? Having the chance to bid on a contract to sell steel to some town down in the U.S. somewhere? Or getting local people working on projects in our own local community? It wouldn’t matter much if we were missing out on doing business in the U.S. if there was enough business to keep people working and making money here at home. Seems to me that should be the first priority.
Unfortunately, our provincial and federal politicians don’t seem to agree.
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