Monday, February 9, 2009

"Buy American" mayhem, you mean there never was a NAFTA?

'Buy American' mayhem
You mean there never was a NAFTA?


From Friday's Globe and Mail

February 6, 2009 at 12:00 AM EST

So was that just a dream we dreamed after all – that we had a free-trade deal with the U.S. giving us secure access to their markets and their public procurement? Because we learned this week that their Congress added a Buy American clause to its huge stimulus package excluding us, causing people both here and there to panic. Or maybe what we got was free trade with a different United States, not the one just south of here?

No, Virginia, it's even weirder. This week's horror and hysteria over a U.S. move to “protectionism” like the Smoot-Hawley tariffs of the 1930s, leading to global “trade war” and disaster – was sheer myth. The Buy American clause and the ensuing “backdown” by Congress meant nothing. Those policies have been in place for decades; they still are. It sounds unreal, yet – Buy American and Buy America aren't demagogic slogans. They are the legal titles of U.S. legislation that goes back to the '30s. It says public spending on things like roads and bridges must go to U.S. companies, but it includes waivers for countries like us that have deals like NAFTA with them. The waivers only apply to direct federal spending, not to spending by state or local governments that receive federal funding. So we're seriously, but not totally, out of luck. End of story. These rules would apply whether Congress added them explicitly to the stimulus package or not.

The rest is posturing.

If you don't believe me, and prefer International Trade Minister Stockwell Day's version ( Wooo … retaliation … wooo … trade war), go to his own department website. It's all there, since long before this. It also recounts how a Canadian steel firm challenged these U.S. policies in 2000 in Florida and lost. What's my point? The U.S. is protectionist. It used NAFTA to destroy the cheaper prices Canadians had been paying for generic drugs, and to flood Mexican grain markets, leading to a border-crossing and immigration crisis. Canadian companies adjusted to this U.S. protectionism long ago.

So what's up? Whence the frenzy? Good question, different answers. Stockwell Day and Stephen Harper get to look vigilant and militant, standing on guard for us, while nothing is really at stake. Barack Obama gets to look presidential. He says sternly that he's against bad things, knowing no vetoes or actions will follow. John McCain wants to repeal the offending clause so the world won't think the U.S. has “gone back” to protectionism, which it never left, but maybe the world won't think so now. Congress gets to look like it is saving some U.S. jobs, while doing zilch to stop the ongoing decimation of U.S. industry.

Derek Burney, Canadian corporate mouthpiece, calls for even less regulation and protection than we now have, on the grounds, as they say in the Obama White House, that you never let a serious crisis (or a fake one) go to waste. Our U.S. ambassador, Michael Wilson, who was involved in the original trade deal, wants to look like it accomplished something it didn't by fighting off a “threat” to it.

I especially like Michael Ignatieff's demand that Stephen Harper phone Barack Obama on this. I'd like to overhear that one. Uh, I'm calling to pretend there's a problem. … Fine, I'm taking the call to pretend the same thing. [Silence. Silence. Silence.] We agree, then. … Yes, good talking to you.

The press hysteria, or pressteria, is due mainly to ignorance, due, in turn, to laziness, plus a preference for a scary story that has a happy ending – the “climbdown” – and may run on Page 1 or lead the news. The exception was Linda Diebel, who told the truth in the Toronto Star on Tuesday, but even her own paper ignored the point subsequently.

It's like the murder on the Orient Express: It turned out everyone participated, but they all did it for their own reasons.

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