Derek Burney and Fen Osler Hampson: A Four-Point Plan to Save Free Trade with the U.S.

(The National Post)

No one should be surprised that Washington’s US$819-billion stimulus package, which was approved by the House of Representatives and is now before the Senate, contains “Buy America” provisions — notably for steel. This is the way the United States often reacts to economic downturns.

According to the current version of the legislation, “None of the funds appropriated or otherwise made available by this act may be used for a project for the construction, alteration, maintenance or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.” In all the euphoria in Canada about President Barack Obama’s election, many may have forgotten that his Congressional allies include several of the most protectionist elements in the U.S. They are now calling in their chits. The new President and his more balanced administration appointees will be tested severely in the weeks ahead — trying to navigate between short-term political pressures and long-term national interest.

What should Canada do in the current circumstances? Our view is that the best defence in this situation is a good offence, based on principled and skillful diplomacy. Read the complete article here.