Saturday, January 31, 2009

Will Barack break our hearts?

Outside of some of the rapture across America these last few months, there has perhaps been no greater booster than Canada, of the hopes and goals of the now 44th President of the United States, Barack Obama.

From those long days and nights on the primary tours, through the November 4th election and on to Inauguration Day, Canadians seem to have come under the spell of the promise of a new regime and its Yes We Can spirit.

The only problem may be; that Yes We Can may mean that for Canada it’s a case of No You Can’t.

As the economic situation continues to worsen around the globe and especially in America, the call of the protectionists is starting to sound loud and long, with no greater champion than Vice President Joe Biden the clarion call of Buy American is starting to ring out across the states of the Union, and as it does, the prospect of the collapse of free trade seems to be high on the new administration’s agenda.

This week, the steel industry made its case through Congress, to the President and with the Vice President, the VP being a fellow that is well known around the steel foundries of Pennsylvania, Ohio, Indiana and beyond, it’s a case that is apparently getting a very thorough examination of.

If, as would be anticipated that America shall buy their steel first and foremost, there’s a good chance that Canada will be sideswiped in the stampede to Buying America. Steel, but the first of what could be an endless list of industries looking to prop up their hometowns and keep their economic engines working to some fashion, all the while as Canada’s export industry would come to a major slow down, if not an outright stop.

The latest move from the Democrats, who have never strayed too far from the protectionist agenda of late, could result in Canadians missing the laissez faire dis-interest of the Bush years, where things may have gone to hell in a hand basket economically, but at least Canada could still deliver their baskets across the border.

As they ponder the era of building trade walls another shot has been fired by the Obama team, this one from newly introduced Secretary of the Treasury Tim Geithner, who now having cleared up and paid up those embarrassing tax troubles from his past, is ready to lead the USA into economic battle, with his first target apparently China.

Secretary Geithner recently chastised the Chinese for their handling of the Yuan, suggesting that they were manipulating their currency at the expense of the American dollar and economy.

It’s a reproach that hasn’t been particularly well received in Beijing and sets up just one more bit of theatre to follow as the world’s economic axis tilts back and forth during troubled times.

While the world hailed Mr. Obama’s election as a positive change and the promise of much in the way of progress, world economic events may provide him with one of the shorter honeymoons with the global population in recent times.

By the time he arrives in Ottawa on February 19th for his one day visit, those protectionist walls may already be under construction and it’s our guess that America won’t be using Canadian wood or steel on them.

Hard times in America will mean hard times around the world, but if America decides to put back up the tariff walls and circle the wagons for their own priorities, the rest of the world is going to be sharing in a much greater amount of pain.

The President must be mindful of the current economic era and the echoes of the past, it was protectionist tariffs introduced by Smoot and Hawley in the early thirties that extended that era’s economic downturn that morphed into the Great Depression, a narrative that should be reviewed from the White House to Congress.

And while the world may still cheer his arrival in that White House, the President may soon find that the policies from some of his advisors won’t be quite as universally hailed as his personality has been.

Toronto Star-- Obama to review 'Buy USA' policy
Toronto Star-- Test for Obama on protectionism
Globe and Mail-- Buy American, spark a global trade war
Globe and Mail-- Obama vows to review ‘Buy American' provision
Globe and Mail-- Global trade wars or voter revolt? Let Obama's difficult decisions begin
National Post-- Only Obama can avert trade war
National Post-- U.S. stimulus plan's 'protectionist' clause concerns Harper
National Post-- 1930 all over again
National Post-- Those that fail to learn from history, get jobs as Congressional trade experts
CTV News-- Harper to lobby U.S. over 'Buy America' policy
CBC News-- Obama administration reviewing 'Buy American' clause
CBC News-- 'Buy American' rule in U.S. stimulus bill could cost Canada jobs
Montreal Gazette-- U.S. protectionism threatens us all
Winnipeg Sun-- American protectionism a bad racket
Canadian Press-- Winds of protectionism gathering strength in U.S.

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