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The Global Economic Crisis and Protectionism

January 29, 2009

President Obama continues to ride exceptionally high in opinion polls among Americans. But even more striking is how exceptionally high in approval he remains among Canadians. In fact, Obama’s approval is nearly twice that of Prime Minister Harper’s.

One might spin this is a great development for Canada-U.S. relations. Under the Bush administration our relationship with U.S. was strained and, at times (I am thinking of trade disputes here) quite tumultuous. And Canadian public opinion of Bush– which usually fluctuated somewhere between low, deep-sea-bottom, and near-earth-core subterranean levels– didn’t help. So with Canadians seeing their southerly neighbours in a nicer, mild, even friendly glow, is nice for a change. A break from hand wringing is always welcome.

On the other hand, this state of affairs presents challenges. Not the least is ensuring that Canadian officials and leaders think clearly about our interests, particularly vis-a-vis the United States. We have to avoid being starry-eyed, and remain strategic and engaged, to protect interests at home and properly advocate Canadian values and vision abroad. Not that Canadian PM Harper has offered any such vision. But it ought to be said nonetheless.

A good example of this is President Obama’s recently announced economic stimulus package. The plan, among other things, includes a massive public spending program, aimed to build and expand national infrastructure, from roads, railways, to infrastructure. This, I think, is a great idea. In fact, Canada should likewise embark upon a infrastructure spending program– high speed light rail (Quebec City-Toronto) is long overdue, and investment in national digital infrastructure offers the kind of vision needed to make Canada a technological leader in the next decades.

But if one looks closely at Obama’s plan, there are hidden problems for Canadians and Canadian economic interests. The most prominent is its inherent American protectionism. The spending package, among other things, contains “Buy American” provisions to ban purchase of resources– like iron and steel– from anyone but American providers. Canadian officials have, quietly, raised concerns with U.S. lawmakers. If the plan passed as is, without a softening of the provisions, Canadian industry would no doubt suffer.

Canadians need to hear about this, and debate it, particularly with President Obama’s first visit to the country pending in February. The Obama Presidency is popular in Canada, and abroad. That’s a good thing. But not every act of the Administration is inherently benevolent.

One Comment leave one →
  1. January 30, 2009 2:15 pm

    Americans and their protectionism!!!

    It’s a lucky thing for Americans that our Canadian politicians are so meek and feeble. Or as they would see it, diplomatic and neighborly.

    Canada is one of the very few countries in the world that has the resources and ability for sustained protectionist international policy.

    When Americans enforce economic protectionism, our government should step in and support our industry sectors with mass purchasing and stockpiling under an economic security clause. It’s not like the rest of the world does not need or want Canadian goods and services. Subsidies are not a foreign concept to us after all.

    We should equally apply the same rules of the game to the USA by raising the costs of our energy and commodity exports. Gone should be the days of trusted and good faith long-term contracts with the USA.

    The USA is so completely dependant on international imports, and it could never sustain its position as economic “Bully” if the other kids in the political schoolyard stood up for justice and equallity.

    This is just another sting to Canadians who are so completely loyal and generous to Americans, and it’s always a sad day when you find out just how selfish your best friend really is.

    Americans have walked all over NAFTA free trade agreements, making a joke of international industry law.

    Americans these days seem like the type to brag about winning a race in which the whole world watched them cheat.

    And Canadians sometimes the races looser, recognizing the signs of psychotic delusion, and narcissism with a propensity for extreme violence.

    Says, yup you’re the winner neighbor, your number 1. But winning is not everything, sometimes it’s how you play the game that counts most.

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