Flaherty Fears Growing Protectionism

(Reuters-Globe & Mail)

Canadian Finance Minister Jim Flaherty said Saturday any protectionist moves by the United States or other countries would meet resistance around the world but Canada would not erect trade barriers of its own.

“There is a clear consensus here that protectionism needs to be avoided, that protectionist is a direction we need not go,” Mr. Flaherty said during a conference call after a meeting with other finance ministers in Davos, Switzerland.

When asked what reaction any moves by Washington toward protectionism might provoke globally, Mr. Flaherty said: “They will be met by resistance by the finance ministers. That’s been a consistent message here.”

The issue took centre stage at the annual World Economic Forum meeting in the Swiss ski resort after the U.S. House of Representatives this week passed a $825-billion stimulus bill with so-called “Buy American” provisions.

The U.S. Senate is to begin debate Monday on its version of the stimulus bill, including a measure that expands the House language of “Buy American.”

The Obama administration said Friday it was reviewing its position on “Buy American” after trading partners sounded the alarm that it could shut out foreign-made steel and iron used for projects funded by the stimulus package -- or an even broader range of manufactured goods under the Senate version.

Canada, the top trading partner of the United States, every year exports about $6-billion worth of steel and iron to its southern neighbour. Read more here.