Apparently, Canada, the EU, China, et al are pissed off about Obama's "Buy American" stance:
OTTAWA -- Facing one of his first big diplomatic tests, U.S. President Barack Obama dispatched an official to the World Economic Forum in Davos, Switzerland, in an attempt to quell outrage from Canada and other countries over plans to make "buy American" a stipulation of the U.S.'s multibillion-dollar economic stimulus program.
Peter Allgeier, the acting U.S. trade representative, used the annual gathering of the world's leading executives and policy-makers to assure his country's biggest trading partners that Mr. Obama understands concerns that the proposal could spark a trade war that would deepen the global recession.
"I'm somewhat, let's say, optimistic at this point that they are sincere, as far as their administration goes in the United States," Canadian Trade Minister Stockwell Day said of his meeting with Mr. Allgeier. "They're looking for a way to deal with this."
The goodwill that rose from all corners of the globe at the time of Mr. Obama's inauguration as the first black U.S. president receded because of legislation in Congress that would force officials to choose U.S. companies when allocating billions in planned infrastructure spending.
Mr. Day quickly condemned the buy-American provision last week as blatantly protectionist, likening the proposal to the heavy tariffs the U.S. government put on imports in the early 1930s, which served only to deepen the Great Depression.
In Davos, leaders and ministers from a score of big trading countries, including Britain, Germany, China, Russia and India, said playing favourites with the tens of billions of dollars that governments are spending to fight the global recession will only start a trade war, exacerbating the present situation.
"Trade protectionism serves no purpose as it will only worsen and prolong the crisis," said Chinese Premier Wen Jiabao, whose country is the world's second-biggest exporter after Germany.
Mr. Allgeier reportedly got the message.
"He indicated that there may be - and he was careful to say 'may' be - a way that they can handle the Canadian concern," Mr. Day told CTV's Question Period in an interview that was conducted Saturday and broadcast yesterday.
The spark for the international outrage came late last week as the U.S. House of Representatives passed legislation that includes a ban on all foreign iron and steel from the $820-billion (U.S.) stimulus package's infrastructure products.
A Senate version of the bill, which is still being debated, would extend the U.S.-only requirement to everything bought with taxpayers' money that is ultimately devoted to the stimulus package.
At stake is not just the $11-billion (Canadian) in steel products that Canada sells to the U.S. every year, but the chance that other U.S. industries will lobby for similar protections, Mr. Day said.
Plus, industries in Canada and other countries would no doubt want to retaliate, prompting a global trade war at a time when sluggish trade flows are already adding to the weight of the global recession.
"This is not the time to be raising protectionist barriers," Mr. Day said. "He [Mr. Allgeier] said that he heard that loud and clear, that the administration is looking at this, and they're aggressively working on it."
Still, John Curtis, a Canadian former official who helped negotiate the country's free-trade agreement with the U.S., was skeptical that Mr. Allgeier's assurances abroad would hold up when faced with political reality back in Washington.
Persuading politicians to scrap the buy-American stipulation will be tough, and will test Mr. Obama's influence with the Democratic lawmakers he helped elect, said Mr. Curtis, now a distinguished fellow at the Centre for International Governance Innovation think tank in Waterloo, Ont.
U.S. voters, who have watched their elected representatives deploy tens of billions of taxpayer dollars to rescue banks and automobile makers, are demanding assurances that the next wave of cash is spent closer to home.
Mr. Curtis also said he doubts that Mr. Allgeier, while a respected trade negotiator, is close enough to Mr. Obama to speak authoritatively about the President's intentions.
"The fact is it wasn't the USTR [United States Trade Representative] and it wasn't the U.S. Treasury Secretary," Mr. Curtis said. "That's why I'm a little skeptical."
While the international community appeared united against the bid to freeze out imports, Mr. Day indicated he will be looking to cut a deal if Mr. Obama fails to persuade legislators to drop the buy-American proposal.
Mr. Day said that in his meetings with U.S. officials, he proposed an exemption for Canadian steel, while at the same time arguing that the protectionist essence of the bills are simply wrong.
Mr. Curtis, who served for more than two decades in the International Trade Department, endorsed that strategy, saying there is a long history of Canada winning exemptions from U.S. import measures.
Canadian steel has been exempted before, and there is a good chance it would win an exemption this time, said Leo Gerard, international president of the United Steelworkers union.
"Canada is not the problem now," Mr. Gerard, who is close to Mr. Obama, said in an interview with CTV yesterday. "It's China, it's Asian countries, it's the Russians who are dumping their stuff."
Mr. Gerard, who is Canadian, said he has supported a Canadian exemption in the past and would do so again.
U.S. protectionism will likely be at the top of the agenda when Prime Minister Stephen Harper meets with Mr. Obama in Ottawa on Feb. 19. Ottawa is concerned not just about the buy-American provisions, but also about anti-free-trade comments Mr. Obama made during his campaign to become the Democratic presidential nominee.
Still, many countries have recently tried to design their economic stimulus packages to prevent "leakage" of government money to other countries, by favouring the building of infrastructure instead of tax breaks. Money spent on infrastructure is widely believed to stay mainly within a country's borders, while money from tax breaks often goes either to people's savings or to buying imported goods -inadvertently stimulating foreign countries' economies.
Obama's next speech in Berlin: "Citizens of the world! Thank you for annointing me as the Messiah and THE agent for "change" despite not having any reason to do so other than half of my skin pigmentation differs from the last President and I'm a much better reader of canned speeches than he is. Anyway, I gotta take care of bizness in the backyard, my crib so to speak, which means y'all gotta take a hike. Yeah, yeah, I know you feel like you've been stabbed in the back, but that's politics....How you like me now, bitches?"
OTTAWA -- Facing one of his first big diplomatic tests, U.S. President Barack Obama dispatched an official to the World Economic Forum in Davos, Switzerland, in an attempt to quell outrage from Canada and other countries over plans to make "buy American" a stipulation of the U.S.'s multibillion-dollar economic stimulus program.
Peter Allgeier, the acting U.S. trade representative, used the annual gathering of the world's leading executives and policy-makers to assure his country's biggest trading partners that Mr. Obama understands concerns that the proposal could spark a trade war that would deepen the global recession.
"I'm somewhat, let's say, optimistic at this point that they are sincere, as far as their administration goes in the United States," Canadian Trade Minister Stockwell Day said of his meeting with Mr. Allgeier. "They're looking for a way to deal with this."
The goodwill that rose from all corners of the globe at the time of Mr. Obama's inauguration as the first black U.S. president receded because of legislation in Congress that would force officials to choose U.S. companies when allocating billions in planned infrastructure spending.
Mr. Day quickly condemned the buy-American provision last week as blatantly protectionist, likening the proposal to the heavy tariffs the U.S. government put on imports in the early 1930s, which served only to deepen the Great Depression.
In Davos, leaders and ministers from a score of big trading countries, including Britain, Germany, China, Russia and India, said playing favourites with the tens of billions of dollars that governments are spending to fight the global recession will only start a trade war, exacerbating the present situation.
"Trade protectionism serves no purpose as it will only worsen and prolong the crisis," said Chinese Premier Wen Jiabao, whose country is the world's second-biggest exporter after Germany.
Mr. Allgeier reportedly got the message.
"He indicated that there may be - and he was careful to say 'may' be - a way that they can handle the Canadian concern," Mr. Day told CTV's Question Period in an interview that was conducted Saturday and broadcast yesterday.
The spark for the international outrage came late last week as the U.S. House of Representatives passed legislation that includes a ban on all foreign iron and steel from the $820-billion (U.S.) stimulus package's infrastructure products.
A Senate version of the bill, which is still being debated, would extend the U.S.-only requirement to everything bought with taxpayers' money that is ultimately devoted to the stimulus package.
At stake is not just the $11-billion (Canadian) in steel products that Canada sells to the U.S. every year, but the chance that other U.S. industries will lobby for similar protections, Mr. Day said.
Plus, industries in Canada and other countries would no doubt want to retaliate, prompting a global trade war at a time when sluggish trade flows are already adding to the weight of the global recession.
"This is not the time to be raising protectionist barriers," Mr. Day said. "He [Mr. Allgeier] said that he heard that loud and clear, that the administration is looking at this, and they're aggressively working on it."
Still, John Curtis, a Canadian former official who helped negotiate the country's free-trade agreement with the U.S., was skeptical that Mr. Allgeier's assurances abroad would hold up when faced with political reality back in Washington.
Persuading politicians to scrap the buy-American stipulation will be tough, and will test Mr. Obama's influence with the Democratic lawmakers he helped elect, said Mr. Curtis, now a distinguished fellow at the Centre for International Governance Innovation think tank in Waterloo, Ont.
U.S. voters, who have watched their elected representatives deploy tens of billions of taxpayer dollars to rescue banks and automobile makers, are demanding assurances that the next wave of cash is spent closer to home.
Mr. Curtis also said he doubts that Mr. Allgeier, while a respected trade negotiator, is close enough to Mr. Obama to speak authoritatively about the President's intentions.
"The fact is it wasn't the USTR [United States Trade Representative] and it wasn't the U.S. Treasury Secretary," Mr. Curtis said. "That's why I'm a little skeptical."
While the international community appeared united against the bid to freeze out imports, Mr. Day indicated he will be looking to cut a deal if Mr. Obama fails to persuade legislators to drop the buy-American proposal.
Mr. Day said that in his meetings with U.S. officials, he proposed an exemption for Canadian steel, while at the same time arguing that the protectionist essence of the bills are simply wrong.
Mr. Curtis, who served for more than two decades in the International Trade Department, endorsed that strategy, saying there is a long history of Canada winning exemptions from U.S. import measures.
Canadian steel has been exempted before, and there is a good chance it would win an exemption this time, said Leo Gerard, international president of the United Steelworkers union.
"Canada is not the problem now," Mr. Gerard, who is close to Mr. Obama, said in an interview with CTV yesterday. "It's China, it's Asian countries, it's the Russians who are dumping their stuff."
Mr. Gerard, who is Canadian, said he has supported a Canadian exemption in the past and would do so again.
U.S. protectionism will likely be at the top of the agenda when Prime Minister Stephen Harper meets with Mr. Obama in Ottawa on Feb. 19. Ottawa is concerned not just about the buy-American provisions, but also about anti-free-trade comments Mr. Obama made during his campaign to become the Democratic presidential nominee.
Still, many countries have recently tried to design their economic stimulus packages to prevent "leakage" of government money to other countries, by favouring the building of infrastructure instead of tax breaks. Money spent on infrastructure is widely believed to stay mainly within a country's borders, while money from tax breaks often goes either to people's savings or to buying imported goods -inadvertently stimulating foreign countries' economies.
Obama's next speech in Berlin: "Citizens of the world! Thank you for annointing me as the Messiah and THE agent for "change" despite not having any reason to do so other than half of my skin pigmentation differs from the last President and I'm a much better reader of canned speeches than he is. Anyway, I gotta take care of bizness in the backyard, my crib so to speak, which means y'all gotta take a hike. Yeah, yeah, I know you feel like you've been stabbed in the back, but that's politics....How you like me now, bitches?"
