"NAFTA? We Don't Need No Stink'n NAFTA!"

[Ron in Regina]

Here's the CNN Spin on this: "Buy American" ignites controversy - Jan. 29, 2009

Rep. Peter Visclosky, D-Ind., who introduced the House's Buy American amendment that won unanimous support, did not believe that the mistakes of the Great Depression applied to this case.

"It's not protectionist - there are no tariffs or barriers being created," said a Visclosky spokesman. "It's about the U.S. steel industry running at or below 45% capacity, and the objective is creating jobs."

Dorgan also rejected the notion that the stipulation might cause an international showdown, arguing that the World Trade Organization does not regulate federal grant programs like those included in the stimulus bill, should it pass.
______________________________

America's Federal Grant Programs would therefore not regulate:
1) The World Trade Organization
2) Other Trade Blocks & Nations, also stimulating their economies that the
USA wants a piece of, but who might be shut out of the U.S stimulus effort.

This below wouldn't be a Trade Barrier?

"For instance, the bills both stipulate that if construction costs would rise by 25% or more due to the purchase of American-made materials, contractors could receive a waiver to purchase foreign materials. The bills also allow for a waiver if buying American is not in the best interest of the economy or taxpayers."

 

[Praxius]

Does the US even have any steel producers big enough to provide materials for planned projects? I don't think so.

Reports last night claimed the US Steel industry is only working at..... um.... 40%? I could be wrong, but I think it was around the 40% mark. This funding would allow their capacity to increase, but of course at the expense of Canadian supplies and work, because no american company can benifit from this plan unless all the steel being used was made completely within the US..... which pushes them to scrap getting steel elsewhere, such as us.

 

[lone wolf]

US industry couldn't afford US steel in the 80's. Allentown is a ghost of itself. The Ohio valley is rusty. They don't really think labour is going to cut them a deal now do they?

 

[Tyr]

Cancel those army trucks and contract with a Canadian industry

How about putting the contract on "hold" until the next American military purchase goes forward. check the Canadian conternt and restructure the truck deal to reflect the percentages

 

[Tyr]

BRUSSELS, Belgium (Reuters) -- The European Commission signaled on Thursday it may contest a "Buy America" provision if it is included in the final version of an $825 billion package to kick-start the U.S. economy.
"If a bill is passed which prohibits the sale or purchase of European goods on American territory, that is not something we will stand idly by and ignore," Commission spokesman Peter Power told a regular news briefing.
Power said the European Union executive, which oversees trade policy for the 27-member bloc, "will be carefully studying the details of the bill before we can say that the U.S. are violating any trade agreement".
European steel confederation Eurofer called earlier for Brussels to tackle Washington over the issue at the World Trade Organization (WTO).
"Our view is that if passed this would be a clear violation of their WTO (World Trade Organization) commitments on government procurement rules," Eurofer said in a statement to Reuters.
The U.S. House of Representatives on Wednesday passed the provision, which requires public works projects funded by the bill to use only U.S.-made iron and steel.
House leaders included the language despite strong objections from the U.S. Chamber of Commerce and other business groups which said it would set a bad example for other countries considering their own economic stimulus plans.
"It is a protectionist measure which goes against the commitment made to the G20 to keep markets open," Eurofer said.
"It is against the interests of the U.S. consumer since the U.S. has a deficit in steel and must import to meet consumption needs."
After a boom period driven by infrastructure projects in China and other developing countries, some U.S. steelmakers have cut production and could see losses in the first quarter as the global economic slump saps demand.
The Buy America steel measure specifically covers airports, bridges, canals, dams, dikes, pipelines, railroads, mass transit systems, roads, tunnels, harbors and piers

 

[JLM]

Harper could start some infrastructre projects in Canada and do the same. Twin the Port Mann bridge in the Fraser Valley, rebuild deterioriating Quebec bridges/overpasses, replace the Lions Gate in Vancouver, the Patullo in New Westminster (just examples)..instead of dropping money into make-work projects in parks that won't have nearly the same effects.

Realistically I think 3 major bridge in one province is a pretty tall order, especially if they are all in the same geographic area. The interior of B.C. is struggling a lot more than the coast and to alleviate the problem up here we'd just need a very few $1million dollar projects. I'd like to see some earthquaking proofing of vulnerable public bldgs. down in quake prone areas. That would result in both the saving of money and lives down the road.

 

[JLM]

NAFTA is good, wben purchasing things across the line there is on duty on stuff manufactured in North America.

 

[Ron in Regina]

Source: Washington Wire - WSJ.com : U.S. Chamber of Commerce Hits Back on 'Buy American'

January 30, 2009, 1:19 pm
U.S. Chamber of Commerce Hits Back on ‘Buy American’

The U.S. Chamber of Commerce reacted heatedly to criticism of its opposition to “Buy American” provisions in the economic stimulus plans.

“Some have slammed the U.S. Chamber for opposing ‘Buy American’ provisions, calling our position ‘economic treason.’ Try economic patriotism,” Chamber President and CEO Thomas J. Donohue said in a statement.

“If our goal is to create good-paying jobs at home by selling American-made goods and services overseas—where 95% of the world’s consumers live—then ‘Buy American’ requirements don’t make sense,” he said. “If we refuse to buy
foreign-made goods, then our trading partners will refuse to buy from us.
And since we are the world’s largest exporter, who will be hurt more?”

The House approved its version of the stimulus package, estimated to cost $819 billion, on Wednesday, and Senate is set to vote soon on its version, which totals nearly $900 billion. President Barack Obama and Democratic congressional leaders hope to pass a unified bill by mid-February. The House bill has “Buy American” provisions that would require U.S.-made iron and steel for infrastructure projects and U.S.-made TSA uniforms. The “Buy American” push could be expanded in the Senate version.

“It’s easy to demagogue opposition to such a pleasing sounding thing as ‘Buy American,’ Donohue acknowledged in his statement. “But it’s time to face the reality about the real-world consequences of these provisions for American workers, businesses, and our nation’s global standing.”

He ended with a stern warning: “In 1930, when Congress approved the Smoot-Hawley tariffs, other countries responded by closing their markets.

The upshot was a collapse in U.S. trade that turned a sharp recession into the Great Depression."

“Those who don’t know history are doomed to repeat it. Let’s not make the same mistakes again, especially now.”
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[L Gilbert]

U.S. stimulus plan's 'protectionist' clause concerns Harper...........

........... for a few seconds. He's one to talk about protectionism (remember $billions bank, auto industry bailouts in Ontario, while the rest of the country gets a few million?)

 

[Ron in Regina]

US reviewing "Buy American" stimulus clause
Source: http://www.google.com/hostednews/afp/article/ALeqM5jdOiIEy3kNaqAXxKowuOETNeaJFA

The House of Representatives passed an 819-billion-dollar version of the economic stimulus Wednesday that contains a "Buy American" provision generally barring the purchase of foreign iron and steel for any stimulus-funded infrastructure project.

The massive stimulus plan of tax cuts and spending has moved to the Senate, where lawmakers are working on their own version that extends the "Buy American" initiative on iron and steel to include all US manufactured goods.

 

[Machjo]

I agree that Obama is wrong on this, but I still wouldn't just go tit for tat either. After all, though Obama is wrong, this would not be as bad for Canada as it might at first seem.

Any money the US government spends to stimulate the US economy must consume US-made goods. But much of this money will go to hiring people too, and that money will go into the pockets of ordinary Americans. If the US government stops buying Canadian-made goods, then this woudl bring down the value of the Canadian dollar to the US dollar, thus making those Canadian-made goods that are not affected by this clause more attractive to the average US consumer. So some of this money would make its way into Canada anyway, but just through a different route.

And as I'd mentioned in another thread, the Canadian government could also shift taxes from income to resources, thus promoting more (labour-rich) value-added exports rather than (labour-poor) raw-material exports. This would have the added advantage of having an effect similar to a tariff (though not quite as strong, granted) while still giving Canada the moral high ground at the WTO by being able to claim quite honestly that it never retaliated for this US trade restriction.

 

[Praxius]

I agree that Obama is wrong on this, but I still wouldn't just go tit for tat either.

That reminds me.... they say two wrongs don't make a right, but they also say two negitives make a positive

 

[Machjo]

That reminds me.... they say two wrongs don't make a right, but they also say two negitives make a positive

Not in this case. The US places moderate trade barriers against Canada and it hurts our economy a little. We retaliate, they retaliate, we retaliate... you get the picture. And next thing you know both our economies are ground to a halt. Now of course some Canadians, sitting there starving and barefoot in winter, and staring through a shop window at a TV set watching US news will be laughing at just how bad the US economy has crumbled thanks to our havin' stuck it to 'em:roll:

 

[Said1]

I don't think it would go that far as Canadian business interests are politicians best interests.

 

[Machjo]

I'm sure (I hope) our politicians are smarter than to go into a tit-for-tat spar, go into a 'drown him even if I drown with him' mentality. Then again, look at how they behave in Parliament!

Seriously, though, I do believe (and hope) they're smarter than that. Waht scares me though is public pressure. After all, we are a democracy... 'unfortunately'. And the voter is not alway that bright. I was just pointing out the hypothetical scenario that we should go that childish route. I'm sure alot of short-sighted unionists would love to go in that direction.