‘Buy American’ Bill Eased

(Toronto Star)

Prodded by Barack Obama and his former rival John McCain, the U.S. Senate last night took the air out of the “Buy American” bubble, easing fears of a trade war in the president’s first month in power.

Senators in a voice vote agreed to change a protectionist provision inserted into the U.S. government’s economic stimulus bill with the addition of a crucial clause – that the bill be “applied in a manner consistent with U.S. obligations under international agreements.”

The wording approved by the Senate appears to go a long way to meet the concerns of the Canadian government, which has argued that the United States should not enact laws that contravene its commitments to liberalized trading regimes under the World Trade Organization and the North American Free Trade Agreement.

Analysts said the amendment should restore calm in Canada, Europe and elsewhere in the orbit of American trade relations, where nerves had frayed amid concerns the world’s largest economy was turning inward under the duress of a global downturn. Canadian government officials could not be reached for comment.

“Canadians should be able to take a deep breath. But this should not give us a false sense of confidence in the road ahead,” said Paul Frazer, a former Canadian diplomat and Washington consultant. Read more here.