The Bruce Report

Contrary to popular belief, Canada’s biggest export to the United States is not oil, or  steel, or even softwood; it’s comedy writers who appreciate, better than most, the richly ironic nature of American politics.

 

And so, the Canucks who work for The Daily Show and The Colbert Report must be observing the Congressional $819-billion stimulus package, which seeks to raise trade barriers against the Great White North, with a gathering sense of mordant amusement.

 

For his part, Barack Obama also gets the joke and, fortunately for we denizens of the Great White North, finds it about as funny as a heart attack. 

 

On news shows, one after the other, over the weekend, the U.S. President downplayed a proposed ban on imports of Canadian steel (worth about $11 billion to us, annually). He told Fox, for example, “I think it would be a mistake at a time when worldwide trade is declining to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.” He followed up with ABC in a similar vein: “I think we need to make sure that any provisions that are in there [the stimulus bill] are not going to trigger a trade war.”

 

You think?

 

Nothing could be more absurd than burdening a bailout package for American industry with a provision that would violate international law, irreparably damage relations with powerful trading partners, undermine both short- and long-term productivity, throw as many as seven million U.S. citizens out of work, and deepen what’s shaping up to be the worst recession – and the first truly global one – in three-quarters of a century.

 

But there it is anyway: A measure that would require infrastructure projects in the United States to use only homemade steel. In fact, a Senate version of the bill actually insists that all manufacturers in the old red, white and blue adopt a strictly “buy American” policy in a cynical attempt to shore up political support among consumers fixated on the notion that their current woes are foreign-engineered.

 

This chauvinistic nonsense is worse than misguided; it’s downright dangerous in a world where economies are deeply integrated, and have been for decades. Or, as Prime Minister Stephen Harper correctly asserted, “The greatest ideological threat at this point in history is the threat of protectionism. That’s the danger of this bill, and it’s why we are opposed to these measures.”

 

Indeed, how much history must one absorb to recall what happened the last time the United States responded to an economic crisis by raising trade barriers? Back in 1930, two gents by the names of Smoot and Hawley successfully sponsored an act that installed punishing tariffs on more than 20,000 imported goods. It started what became known as the “Great Cascade,” as dozens of other nations erected their own walls, and kick-started the Great Depression, a misery from which the world did not emerge for ten, long years.

 

For New Brunswick, of course, the return of American protectionism would be an unmitigated disaster. As Premier Shawn Graham recently pointed out, the province is the most heavily export-dependent in Canada. Billions of dollars a year in bilateral trade with the United States crosses our border. And what many adherents of restricted international commerce fail to appreciate is that much of what we, in New Brunswick and elsewhere in the country, send south are actually remanufactured goods. In other words, once we receive materials from the U.S., we refine them and add value to them (according to our customers’ stipulations), and then ship them back for productive use by a wide range American industries.

 

What does the current stimulus bill say about this little complication?

 

Obama’s seeming intervention on behalf of common sense is good news. But, frankly, it does come a little late in the game. And his carefully chosen words are only now having an impact on the thinking of his Democratic cousins.

 

Certainly, the issue will top the agenda later this month when the U.S. president meets with Harper and other Parliamentary leaders. Only then will we know whether the joke – as bad as it is – is on all of us: Americans and Canadians, alike.

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