Protectionism not the answer, US beneficiaries of trade should speak up
I’m spending a couple of days in Canada visiting some high-tech companies, and I came across a column in the Globe and Mail titled “Canada needs to enlist its allies in the U.S. to fight Buy American,” by Michael Fortier, former minister of international trade. Fortier criticizes “the pernicious effects of the Buy American provisions” of the Obama administration’s stimulus program, noting that many Canadian companies claim they have been cut off from contracts originating from the program.Fortier claims the exclusion is just the latest in a series of problems between the two countries. He writes. “Canada has struggled with the new rules of engagement since Sept. 11, 2001. The United States transformed national security into an obsession. We were half-expecting waivers from the stream of US measures adopted, but instead experienced, among other things, lengthy border delays. Notwithstanding the North America free-trade agreement and decades of goodwill, it appeared that our goods were triaged just as any other country’s. What had begun as a security concern was quickly transformed into a trade issue.”
He cites Canadian ministerial visits to Washington as one way Canada is addressing the issue, but he says that’s not enough. He says Canadians would be wise “to invest as much time with communities all over the US that benefit from two-way trade with Canada…. According to recent data, more than 7.5 million Americans derive employment from free trade between the US and Canada. Moreover, more than half of the US states count Canada as their primary export market. Whether it is Oregon’s $2-billion in exports, the 800,000 Californians whose jobs depend on free trade or the $1-billion that Canadian tourists spend annually in Florida, we have strong arguments to fight the perception that free trade benefits solely Canadians.”
The Buy American provisions are understandable, although unfortunate, and not just as they apply to Canada. Although trade sanctions may be appropriate in response to particular actions of trading partners, protectionism enacted across the board is the wrong way to go. Don’t wait for Canadians or representatives of other countries top visit your region to speak up.
ET commented:
As someone noted earlier, we don't have fair trade with many nations. In the US companies need to comply with health and safety regulations that China, India and other Asian manufacturers either don't have or can safely ignore. Most of the health, safety, and enviromental laws were put in place for good reasons, a lot of people were getting hurt. Now companies are shifting manufacturing to areas where they don't have those 'costs', making US manufacturing at a artificial disadvantage. I'm not saying get rid of the safety laws, I'm saying if a country doesn't have or doesn't enfore comparable laws then tarrifs can be applied. If a foreign company meets similar laws, and still can sell for less, by all means, let them compete without tarrifs.
libguy commented:
Fair trade can be good, but we have never had anything close to fair trade. With China artifically keeping its currency 20% below market, and having tarifs on goods the USA sells, but not allowing us to have the same tariffs - NO, THIS IS NOT FAIR TRADE - and has just sent our job - indeed our ability to make things, to other countries, just to enrich the upper 1% of wealthholder in the USA. Protectionism built Toyota, and almost every other big foreign company. We need to support American workers - to do otherwise is Anti-American, unfair, and has taken our country in the direction it's gone for the last 30 years; i.e. downhill in every respect (except for the rich). Support America - not the rich.
Sales Guy commented:
Yes we should not protect our markets from low cost countries. Engineers in low cost countries were educated in North America or they were educated by others who were educated in North America. Their engineering potential is as good as ours at a fraction of the cost. I say keep outsourcing - its money in my pocket!
Dennis commented:
Free trade is a good thisg... EXCEPT US Defense contracts should be available EXCLUSIVELY to US Corporations! The thought of a US Tanker made by EADS or Radar Guidance system made overseas is incredibly foolish. When TAXPAYER dollars are spent, they should be spent HERE.
Frank commented:
Buy American, YES YES YES! Long overdue!!!
European commented:
Protectionism is a thing, which also pops up here in Europe every once in a while. But fortunately most people, even some of the political class, understand the simple market rules: imports, exports, the currency exchange rate and the inflation rate are closely coupled.
If a country declines to import goods, either the export will stall automatically or the exchange rate will go down to make the exported products cheaper on the market. As engineers, we should instinctively understand, that different potentials can only persist under complete isolation. No-one that I know, at least outside North-Korea, wants that. If the isolation is not complete, the market will be balanced again after a while.
It may work, to protect certain industries (like farming etc.) for a while, but that will always be at the expense of some other industry. And what makes things dangerous, a protected industry has no incentives from improving and becoming better than others. We have seen that twenty years ago here in Germany. The former East Germany was a protected market. Much like many other products, they have produced almost the worst cars in the world, but still people bought them and even waited 15 years for shipment. That was clearly a consequence of protectionism.
Only losers ask for protection, winners don't need it!
Mark from Wichita commented:
It's not just Canada that is or should be conplaining. Because of the twins of trade protectionism and cultural isolationism, we were blessed with the last two world wars. These conditions are simply a breeding ground for distrust and misunderstanding, with the results working in disfavor for all parties involved. Unfortunately, with the existing majority of the world in a love/hate relationship with the US (love because of our vast resources and hate because the world can only get assess to it on our increasing narrowing terms), I suspected things will get worse before they get better.
BUY AMERICAN commented:
YES! BUY AMERICAN, YES, BUY AMERICAN!!!
Doug from Vancouver commented:
What do Canadians sell to the US: wood, oil, gas and other un-manufactured materials. What does the US sell to Canada: computers, software, manufactured goods. NAFTA is good for the US as it gives the US free acess to ur raw materials to buy and our buyers for your goods. We do gain a share of the US market in return but in terms of jobs gained the US is way ahead. Unfortunately governemtns on both isdes of border just don't get it and are determined to make the lives of small exporters like myself very difficult. My best customers and suppliers are all Americans. Lets work together to solve these energy and money wasting border restrictions.
Jacques Strop commented:
Not sure what China has bought this time, but aren't Canada and Mexico in America? My Dodge was made in Canada...
