U.S. Canada Relations - is there a conflict in Ideologies

by albertacowpoke | August 11, 2009 at 04:23 am

389 views | 35 Recommendations | 23 comments

Prime Minister Harper, President Filipe Calderon and President Obama held a news conference yesterday after the Three Amigo Summit in Guadalajara, Mexico.

Canada's position on the "Buy America" clause in the U.S. Stimulus Bill has been very clear. Canada thinks that it smells of protectionism and will lead to further U.S. Protectionism. The bill has a clause that requires steel and other manufactured goods to be bought from American suppliers for public projects financed by stimulus funds, even if those goods cost more.

President Obama brushed this clause aside stating that it would not affect the Billions of Dollars of trade between Canada and the U.S.

Prime Minister Harper, during the press conference made clear that he would continue to press President Obama on this issue. Canada's Premiers expect him to.

As much as we may want to push it aside, Canada's economy is interlocked with that of the United States. The auto industry is a good example . The Canadian Conservative Government, certainly, is ideologically at odds with the bail out that the U.S. government implemented. In order not to lose out, Canada was forced to partake in the bail out.

Ontario's economy which is largely based on steel and other manufactured goods, comes to mind as being affected by the "Buy American" policy.

The lumber industry has been a long standing dispute that finally was resolved by the WTO. Canada agreed to write off millions of tariffs collected in the US. The cattle industry had its borders closed due to BSE, even though the U.S./Canadian cattle industry is interlocked. The closing of the border was not based on science but on lobbying, mostly from Montana cattle producers. Even after the USDA reopened borders, Montana cattle producers continued with court challenges.

The delays at the border have also contributed prop the "Buy American" policy, by stifling trade and make "on time delivery" a little more difficult to achieve.

Prime Minister Harper seemed to indicate yesterday that he was not pleased with Obama's response and that he will keep pressing him on these issues.

Does this indicate a clash in ideologies? Canada has been increasingly nervous about the massive deficits in the U.S. What happens in the U.S. afffects us. As we say when the Elephant sneezes we get the flu.

Does Canada have any cards to play to press the U.S. Administration on this issue? Though limited, I suspect, we do.

Prime Minister Harper is scheduled to visit President Obama in September. It will be interesting to see the press conference after this visit.

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Barry Artiste

at 06:24 on August 11th, 2009

Ah, Legal Loopholes, the Bread and Butter of struggling economies.

albertacowpoke

at 06:31 on August 11th, 2009

The legal loopholes is what gets politicians moving around the real issues. As we speak I.m watching a town hall meeting in Lebanon, PA with Arlen, Specter. Wow is the political doubletalk rampant.

Iffy (not verified)

at 06:56 on August 11th, 2009

Canada used to stand for things with depth and meaning. These days, Canada means 'America, for a few cents less!'

Notice the thread through all these stories? Canada niggling over petty issues like softwood lumber import tariffs, or a few extra pennies on some stupid tax. Bureaucrats' issues. Nothing with heart and soul: just the petty micing of a petty nation.

Don't expect other countries to respect you when you behave like that. I mean, really, don't expect others to care...

albertacowpoke

at 07:07 on August 11th, 2009

Iffy I take your point, but the petty lumber issue over a few pennies meant jobs in Canada. The shut down of the border for Canadian cattle meant the livelihood of farmers in Alberta. These issues are of consequence of everyday people. Would you like the Canadian government to ignore them? Most of those positions by the US were political in nature and not based on reality. Science didn't justify the closure of the border. Stump fees did not substantiate the claim of the US that this was a government subsidy. The WTO supported Canada's point of view. These issues shouldn't even end up at the WTO for ruling. We have a NAFT tribunal that should easily resolve these positions. Obviously the NAFTA resoution tribunal is also politically motivated. Thanks for your comments.

eastvanray

at 09:49 on August 11th, 2009

You must be American.

Iffy (not verified)

at 07:53 on August 11th, 2009

Thank you for your reply. It makes me wonder what the NAFTA tribunal is doing? Shouldn't they be heading off this stuff before it becomes a problem? Isn't that the point of these cross-national agencies?

The political battles between Canada and the US should really be about substantive issues like philosophy and foreign policy. They would respect us more for it: but these petty things make Canada look like a whiny US state than a nation with its own political history and sovereignty.

albertacowpoke

at 08:01 on August 11th, 2009

The NAFT tribunal consists of appointees from both sides of the border. They will not look at issues objectively. They move with the political agenda of either nation. Personally I think NAFTA should have moved us closer to the way the EU operates when it comes to trade issues. Of course they also have a European Parliament to deal with issues of concern. It makes them speak with one voice. I don't see that happen in North America anytime soon.

sara star

at 08:23 on August 11th, 2009

How does the US justify slapping enormous fees for the Mexican truckers coming to Canada? I guess just to use their roads...

albertacowpoke

at 08:52 on August 11th, 2009

Paying for roads is normally done through licensing. At least that is how it.s done in Canada for cross Canada truckers. They get a transit permit or license plates for the jurisdiction they travel through. The fees slapped on Mexican truckers is a form of applying tariffs to protect US truckers.

Bj American (not verified)

at 10:10 on August 11th, 2009

Rah rah for you Canadians!!! Why can't my fellow Americans see what is happening...They are so Obama hyped that they are deaf, dumb, and blind!!! Canada stand and demand!!!! Bless you all.

albertacowpoke

at 10:59 on August 11th, 2009

Some people just see the world the way they want to see it. That goes for either side of our border. Personally I think that the economy is affected by market forces and that government intervention can do little. Governments can influence the economy through taxes, but that is where it stops in my opinion.

As we have all seen, stimulus is too slow to make it where it is needed to create jobs. Government bureaucracy is way too complicated to do anything in a hurry.

Edmonton just announced that housing starts are up. Stimulus had absolutely nothing to do with it.

marianmo

at 10:19 on August 11th, 2009

the soft wood lumber issue was not started during the obama time, if the US wont abide by international laws, and regulations, i'm wondering why anyone would....if the US feels that laws and negotiated treaties are important, they should look back and see what they have done to Canada..protectiionism of any kind leads to more protectionism...and chaos.....the buy American policy goes against NAFTA, and international trade policies...and needs to be re examined....like i said why should other countries abide by the rules when the US doesn't seem to see the need to

albertacowpoke

at 10:52 on August 11th, 2009

It really doesn't matter whose administration it started under. Clinton signed the original free trade treaty negotiated by Brian Mulroney and Regan through Herbert Walker Bush. The NAFTA Resolution Tribunal was there to settle trade disputes but has never been adhered to. This is not just Obama or Bush this is all Administrations. The "Buy American" provision just reinforces what we already knew.

158

at 11:29 on August 11th, 2009

I think it is partly a change in status. For 159 years the US was undisputed leader of North America and Canada followed.

Now Canada is trying to go its own way and there will be conflicts.

albertacowpoke

at 12:34 on August 11th, 2009

I think there have always been conflicts between Canada and the US. Let's go back to the war of 1812. We also went our own way during World War I and World War II. We declared war when Britain did. If anything we have become closer aligned to the US since the end of World War II.

The relationship has always been cordial, though strained at times. Let's face it we share a continent and as a consequence we have to learn to live with each other. There are many commonalities between our two nations.

Jody (not verified)

at 12:01 on August 11th, 2009

It's my understanding that Canada can escape "Buy America" by allowing American companies to bid on provincial government contracts. I don't have a link, however I recall a report that most provincial premiers wanted to exclude American companies to favour local firms when purchasing goods and services. The report stated that many EU governments had opened up government contracts to US firms and subsequently aren't bound by "Buy America". You reap what you sow I guess.

albertacowpoke

at 12:38 on August 11th, 2009

Thanks for your comments Jody. I am not familiar with the bidding process as far as American companies go. Therefore I can.t comment on it. I know there is an association of Governor and Premiers of Border States. There are a lot of co-operative measures between states and provinces at that level. Our provinces value their autonomy as well.

CalgaryDave (not verified)

at 07:06 on August 12th, 2009

We seem to be missing the point here. All these trade disputes are between parties fighting over a diminishing pie. Fact is the US economy is out of cash and will be purchasing less from Canada (and others) going forward.

They finally realize that after years of trade deficits, they need to repatriate their productive capacity and redress the trade imbalance. This means that Canada needs to find new markets for its manufactured goods although its commodity business should remain solid.

US protectionism is only going to increase.

albertacowpoke

at 10:22 on August 12th, 2009

Thanks CalgaryDave for your comments. I agree we should probably start looking toward the EU for manufactured goods.

eastvanray

at 10:37 on August 12th, 2009

One word....CHINA! China will soon overtake the US as the biggest market in the world and we don't want to miss that boat. The growing middle class in China will drive production of natural resources as well as manufactured goods. The EU maybe politically more comfortable but does not hold a fraction of the potential of China.

albertacowpoke

at 10:44 on August 12th, 2009

I agree with your assessment eastvanray, but I doubt that we will be able to compete with China as far as manufacturing goes. China has much lower labour costs. Perhaps in time that will change. Resource based industry will be able to establish markets in China.

eastvanray

at 13:06 on August 12th, 2009

There will always be areas where Canada has a relative competitive advantage. They will be in areas of manufacturing that are capital and resource intensive and not labour intensive. Canadian quality control is also much better than in China so we will do well in higher quality products that will be in demand by a population with growing disposable income.