It’s been a summer of swine and seals in the office of the International Trade Minister, Stockwell Day. Colloquially, H1N1 is called swine flu and it’s been causing some trade sniffles for Canada as we’ve been affected by cases in almost every region, while other countries are taking it as an excuse for trade protectionism. Another file on Day’s desk is the EU decision to ban the marketing of seal goods. I had a chance to chat with the Trade Minister on these topics and briefly on the topic of free trade.
Late breaking news from DC,
The Senate will vote on this surprisingly contentious issue tonight, after a day of vocal lobbying from corporations and other countries. Sens. Byron Dorgan and Max Baucus have an amendment to make the “Buy American” provisions consistent with international trade obligations. That’s in line with what the White House has requested. It’s not clear what the language will require; either companies would be required to use American-made steel, iron and other commodities in projects, or they won’t.
Trying to salvage the Buy American provisions late today, the Steelworkers Union urged lawmakers to include Canada in its definition of “American.”) Some Democrats have threatened to withhold support from the legislation if it doesn’t include Buy American provisions. The Senate and House versions of “Buy American” will have to be reconciled in a conference committee.
I’m not sure about how I feel about US law defining “American” as inclusive of Canada (what other legal implications might this have one wonders). However, if this goes through, this may save Jack Layton’s base (unionized steel) and infuriate his protectionist sensibilities too. Layton has been pushing a “Buy Canadian” policy, effectively reacting to protectionism with protectionism. A change in the provisions to label it a “Buy North American” policy would still be protectionist (though broader to include Canada) and one wonders what sort of concessions would be asked of our country in participating in such an arrangement. What would this mean for labour and/or commerce mobility within Canada and the US, and outside of both countries on steel manufacturing and related industries?
Canadian labour and therefore the cost of our steel is relatively expensive compared to Mexican steel. Dems are considering the competitive quotient between Canada and Mexico and are likely finding that Canada is a safe concession for their constituents.
Senator John McCain, who Canadians passed over for Obama, introduced legislation earlier today to completely strip the “Buy American” provision out of the Obama stimulus bill. Stephen Harper, Gilles Duceppe, Bob Rae and Michael Ignatieff have hoped that the US Congress will remove the protectionist element from the stimulus package.