Trade-offs

(Andrew Steele — The Globe and Mail)

There should only be three issues on Stephen Harper’s agenda when Barack Obama visits next week: trade, trade and trade. Protectionism is always a major threat to prosperity during an economic downturn.

The famous story of the Smoot-Hawley Act spurring on the Great Depression got a lot of play during the 1993-94 debates about NAFTA, and began another round of rotation with this current economic downturn.

What a lot of Canadians forget about the infamous protectionist tariffs in the bill was that Canada actually raised tariffs preemptively, a full month before the bill had even passed. Our trade barriers started on about 30% of U.S. exports to Canada, and after a new Conservative administration was elected in the days following the bill, that was raised to cover more than 75% of U.S. exports. At the same time, the Bennett Tories sought preferential treatment from Britain and the Empire, a bit of a ridiculous move considering the relative proximity of - say - British Columbia to Bellingham, Washington versus Birmingham, England or Bombay, India. Read more here.

Related: Obama needs more Canada.