"Buy American"

How quickly the mood can change. I was watching the news the other night and I thought President Obama already looks older, his face more drawn.

The conservative media in America is being rejuvenated by one tainted cabinet appointment after another, and the President is - for reasons that totally escape me - taking on Rush Limbaugh. Maybe the President wants Rush around, figures Rush is a vote winner for him. I don't know.

Anyway, the Rush vs Obama battle is a distraction. The real alarm bells are ringing in Canada. Levi Folk of Canada's Financial Post writes:

[p]lans by U.S. Congress and President Barack Obama to put a fence around its US$825-billion stimulus package by implementing a "Buy America" policy is a veiled attempt to export unemployment to the rest of the world.

Want more? How about this from the Canadian TodaysTrucking.com?

"If these Buy America provisions are applied, they would have a significant and detrimental impact on Canadian businesses exporting to the United States," Jayson Myers, president of the Canadian Manufacturers & Exporters, says in a letter to International Trade Minister Stockwell Day. "Canadian manufacturers and exporters need reassurance that the national treatment provisions of the NAFTA and our other treaties with the U.S. provide a safeguard against the restrictive provisions of proposed U.S. legislation."

Prime Minister Stephen Harper told national media that the provision "goes against the spirit of free trade."

And, probably the best is this one from Michael Den Tandt of the Winnipeg Sun.

But now it seems the House of Representatives wants to do likewise -- for real. As it now stands the $819-billion (US) stimulus bill says that any steel used in any project funded by the bill must be made in the United States.

And it could get worse. The Senate reportedly wants to amend the package to require that virtually all stimulus-funded projects use only U.S.-made goods and gear.

That's against the law -- international trade law, that is, which the U.S. has always championed. It's also the absolute worst policy imaginable in the face of a recession. Protectionism is a virus. Its spread in the early '30s was a main cause of the Great Depression.

… We are America's largest export market, by far. Canada buys more U.S. exports than all 27 countries of the European Union, combined -- though they have 15 times our population.

Another tidbit: Canada is the largest foreign supplier of U.S. crude oil, larger even than Saudi Arabia. Canada supplies virtually all of America's natural gas imports, which fuel many of its power generation plants.

Can we afford to see a wall go up along the border? Nope. But neither can the United States of America. Members of Congress would do well to remember that, as they set about crafting a final version of this bill.

This is how trade wars start: little moves that spark a tit-for-tat, up-the-ante type battle until everyone's a whole lot poorer and underemployed. The President has to resist the calls for "Buy American" provisions in any new stimulus package.