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This article was published 24/5/2009 (4093 days ago), so information in it may no longer be current.
The reason: Obama seems unable to stop the mounting protectionist pressures in America resulting from the global recession. America is our largest export market. Any decline in that market could cause us problems.
Jim Prentice, Canada's environment minister, says a bill at present before Congress could jeopardize our trade and prosperity. It would impose tariffs on imports from countries that allow greater greenhouse gas emissions than America. Known as border carbon adjustments, they are included in a draft climate change bill being debated by Congress.
The adjustments, says Prentice, are "a thinly disguised restriction on trade and an impediment both to wealth creation and to the attainment of our own collective objective, which is to address greenhouse gas emissions and to reduce them."
Bob Page, head of the Ottawa-based National Round Table on the Environment, says "we don't have a hope in hell" of fighting American protectionism masquerading as environmental action. Recent talks with senior Washington officials have convinced him that "Canadians overemphasize and exaggerate their role in the U.S. Congress" and that America is going it alone on climate change.
The only choice we have, he told The Globe and Mail, is to introduce new climate change policies this year that are far more aggressive and sweeping than those already announced.
In addition, Ottawa must do away with the multitude of rules in this country. British Columbia, for example, has a carbon tax and Quebec is considering a cap-and-trade system. Ontario and Manitoba may soon follow suit. Business wants one national cap-and-trade system based on hard emission caps, he says.
In other words, Ottawa should stop dilly-dallying with climate change. It has wasted nearly two years trying to please everyone. If Canada's exports get hit with higher American tariffs, it will, in large part, be Ottawa's fault.
Ottawa's dwaddling is implicated in another Canada-U.S. trade problem. Some American states and municipalities are using stimulus funds to "Buy American." Obama has said "we have rejected the protectionism that could deepen this crisis. History tells us that turning inward can help turn a downturn into a depression."
But American states and municipalities are not covered by NAFTA, nor are Canada's province. American officials said they could guarantee at least 38 states would accept free trade, but Canada did not pick up the offer. Provincial panjandrums can't agree on free trade among themselves, let alone with the U.S.
One of the most egregious examples of protectionism occurred at Camp Pendleton in Oceanside, Calif. There, a contractor ripped out perfectly good Canadian pipe, complaining it didn't meet "Buy American" rules. His project wasn't even covered by foreign content restrictions.
The Canadian Manufacturers and Exporters Association says seven pieces of legislation containing protectionist language are before Congress. They include bills to fund sewer and water projects, increase broadband access, smart electrical grids, the replacement of Air Force One, the purchase of 100,000 hybrid vehicles and the fixing of government buildings.
Hillary Clinton, the U.S. Secretary of State, said last week the Canada-U.S. border is problematic and both nations must work together to "harden" it. For those who think the U.S. should treat Canada and Mexico differently she said: "Americans are worried about every port and point of entry; I don't think we have any lesser concern about any route into our country than any other one."
Another major problem with protectionism is that it doesn't fit with current manufacturing processes. In the old days, products were usually made in one country. Now, in Canada and America, manufacturing is an integrated process. As they are being made, products move back and forth across the border. An example: Why would America discriminate against steel beams fabricated in Canada from raw steel made in the U.S.?
Still want to criticize Obama for not curbing protectionism? Go ahead. But remember our inaction on government procurement and climate change made the situation worse.
Tom Ford is managing editor of The Issues Network.
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