Buy America is Just the Beginning of Our Trouble

(Embassy – Leslie Campbell)

The “Buy American” clause in the U.S. economic stimulus bill could turn out to be just the tip of the iceberg in terms of trade hurdles emanating from the new Democratic Congress.

The mini-crisis about Buy American may pass, but it would be a mistake to view its insertion in the bill as an anomaly to be ignored. Congress is in a mood to protect and reward local fiefdoms and to penalize the multi-national corporations perceived to be exporting jobs.

In one example of newfound chutzpah, seven Democratic senators wrote on February 4 to Tom Vilsack, President Barack Obama’s agriculture secretary, asking him to revise country-of-origin labelling (COOL) rules to protect against food produced in countries with “fewer health and safety standards” in order to “boost our livestock producers.”

Canada and Mexico have the most to lose from COOL and most Canadians would be surprised to learn that their country has fewer health standards than the U.S. The senators’ request seems to be aimed more at shoring up domestic industry than genuinely targeting food safety.

In another example of the congressional mood, a bill hidden deep in the shadows of the stimulus debate would, according to its sponsors, give the office of the U.S. Trade Representative (USTR) more authority to “enforce trade agreements we already have” in order to “stem the outflow of U.S. manufacturing jobs due to trade competition.”

The Senate bill, introduced February 2, is co-sponsored by moderate Maine Republican Olympia Snowe and Montana Democrat Max Baucus, with support from Democrats Kent Conrad and Jay Rockefeller. Calling it the “Trade CLAIM Act,” the senators want to force the USTR to act on virtually every complaint about foreign trade practices brought forward by U.S. industry. From Canada’s perspective, U.S. industry already uses questionable trade complaints to harass their Canadian counterparts, particularly in the softwood lumber industry. Read more here.