Protectionism?
Old 01-30-2009, 08:34 AM   #1 (permalink)
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I came across this article in the Toronto Star today. Before I get into it, I'll post it here:

Quote:

Obama's 'Buy American' plan blasted
TheStar.com - World - Obama's 'Buy American' plan blasted


THE ASSOCIATED PRESS
U.S. President Barack Obama speaks about the economy as Treasury Secretary Tim Geithner looks on in the White House, Jan. 29, 2009. Bid by U.S. Congress to block foreign products 'would be catastrophic' for Canadian companies

OTTAWA–A "Buy American" rider in the U.S. economic stimulus package that would block the use of foreign-made iron, steel, textiles and manufactured products is triggering a wave of alarm in Canada and around the world.

"The effect would be catastrophic," said Jean-Michel Laurin, a spokesperson for the Canadian Manufacturers and Exporters, which has asked the Canadian government to urge U.S. President Barack Obama to reverse the measure.

As China, India and the European Union warned that protectionist barriers would hinder world trade, Prime Minister Stephen Harper said Canada expects the United States to respect its free trade commitments as it moves to build new roads, railways, bridges, airports and housing.

"This is obviously a serious matter and a serious concern to us," Harper told the Commons.

"I know that countries around the world are expressing grave concern about some of these measures that go against, not just the obligations of the United States but, frankly, the spirit of our G20 discussions."

Liberal foreign affairs critic Bob Rae said bluntly the position taken by the U.S. Congress is illegal.

"A country cannot bring in a measure that restricts international commerce and international activity in this way," he said.

However, late yesterday, Obama's administration signalled a different view. In an interview with CNBC, U.S. Vice-President Joe Biden defended the "Buy America" steel provision.

"I don't view that as some of the pure free traders view it, as a harbinger of protectionism," Biden said.

The U.S. House of Representatives passed an $819 billion stimulus package Wednesday night that would effectively bar Canadian iron and steel from infrastructure projects receiving the federal funds. Foreign substitutes for American-made products would only be allowed if the American content drove up the cost of a project by 25 per cent – much higher than the 6 per cent to 7.5 per cent price advantage allowed under current regulations.

It would be a huge blow. In 2007, $5.8 billion in Canadian-made "iron and steel products" were exported to the United States, according to Statistics Canada.

A version of the bill in the U.S. Senate goes even further. It would exclude most foreign-made manufactured goods.

More than half of all goods made in Canada – 55 per cent – are sold to the U.S. market. More than $1.7 billion in goods and services crosses border daily.

Many of those exported products actually cross the border back and forth several times as they are built, shaped or assembled. They have Canadian and U.S. content, and jobs are at stake on both sides of the border, says Laurin, of the Canadian manufacturers lobby group.

"I think it's a very troubling development if it gets signed into law," said Scotty Greenwood, executive director of the Canadian American Business Council in Washington, D.C.

While the legislation is not a done deal yet, Canada has only limited time to push for changes, said Greenwood, a former top official in the U.S. embassy in Ottawa.

Ken Neumann, United Steelworkers union national director for Canada, predicted Canadian steel would end up with an exemption from the U.S. preferential buying policy because the industry is so integrated. He described the "Buy American" stimulus bill as an opportunity.

"It helps the U.S. economy and ... and then Canadian workers are going to benefit from it," he told the CBC.


As officials at Canada's embassy in Washington scramble to lobby U.S. senators to water down the language in the bill, Canada's trade and industry ministers suggested the measures could be challenged under the North American Free Trade Agreement or at the World Trade Organization.

"We are reminding the Americans that they have legal obligations under NAFTA, under WTO," said International Trade Minister Stockwell Day. "History shows clearly that you can't fall back into protectionist measures. That happened in the 1930s and what could have been a bad one- or two-year recession turned into, as we know, the Great Depression. So we want to curtail that."

But a NAFTA challenge will be neither easy nor a quick way to resolve anything.

The Canadian exporters lobby group fears that if American stimulus funds flow to state governments, any challenge by Canada would meet fierce resistance because state governments are not signatories to NAFTA.

On the other hand, said trade lawyer Lawrence Herman, of Toronto's Cassels, Brock & Blackwell law firm, because it's a federal bill, an argument could be made that the "Buy America" policy is a breach of America's obligations under NAFTA and WTO. However, any challenge would take years, and would be unlikely to produce a remedy of compensation for Canadian firms that lose out on contracts.

The real fear is America's move will trigger other governments to apply similar measures.


"If other major economies did the same thing, then arguably it would work against stimulating global recovery," said Herman.

Ontario Finance Minister Dwight Duncan expressed alarm at the anti-free trade rhetoric in Washington. "These issues make me very nervous. I talk not just about overt protectionist measures," said Duncan, adding he is worried about "the thickening of the border that is less overt."

In a letter to the federal government, the Canadian Manufacturers and Exporters urged Harper to make the issue an urgent priority in his discussions with Obama.

Already, opposition to the policy is emerging from the U.S. Chamber of Commerce and industrial heavyweights like Caterpillar, General Electric and the domestic aerospace industry, who fear an international backlash.

NDP Leader Jack Layton said Canada should respond with a "Buy Canadian" policy as part of the government's stimulus package.


With files from Robert Benzie
Has no one ever picked up a history book? During the catastrophic crash of 1929, a way the US attempted to stimulate its economy was by closing its borders and instituting protectionist measures. It didn't work as by that point the world had moved to a global market.

Now, we're simply repeating the step again? Why? What good would it do to usher in protectionist measures? In the era of globalization, an era which the US has done fairly well in, a panic move such as this would be beyond catastrophic in my opinion. This is just ridiculous.
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Old 01-30-2009, 09:05 AM   #2 (permalink)
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I didn't read it all but

Does this say that U.S. consumers/business can only but U.S. good, isn't this communism

If Obama does it. WOW good god he is dumb just like passing a stupid $1 trillion plus "stimulus plan"

China, Japan, SE Asia, Europe would be furious. They make a lot of dough selling to U.S.
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Old 01-30-2009, 09:21 AM   #3 (permalink)
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It will never work... there is no thing as US business any more... heck there is no anything business any more... all those huge companies are international and it's a science to figure out where money is ending up...

Products would still get built in China, sent to US where it would get 'assembled' so that it can have 'Made in USA' or 'Assembled in USA' label... in eighties US got scared of Japanese car makers and created quotes for non US made cars... so Japanese created Lexus, Infinity and Acura and put factories in North America...

Not to mention that if US alienate Canada it can only push Canada closer to EU... I am sure EU would salivate with a thought of having Canada become their partner or even a EU member and use Euro... just think of it... with stable Canadian economy, rich market and, most of all, almost endless resources it would make EU that much more stronger.

And for Canada it would give them larger and richer market then US to export their goods.
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Old 01-30-2009, 09:23 AM   #4 (permalink)
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Originally Posted by Krazy Ivan View Post
It will never work... there is no thing as US business any more... heck there is no anything business any more... all those huge companies are international and it's a science to figure out where money is ending up...

Products would still get built in China, sent to US where it would get 'assembled' so that it can have 'Made in USA' or 'Assembled in USA' label... in eighties US got scared of Japanese car makers and created quotes for non US made cars... so Japanese created Lexus, Infinity and Acura and put factories in North America...

Not to mention that if US alienate Canada it can only push Canada closer to EU... I am sure EU would salivate with a thought of having Canada become their partner or even a EU member and use Euro... just think of it... with stable Canadian economy, rich market and, most of all, almost endless resources... and for Canada it would give them larger and richer market then US to export their goods.
I think that last part there is more likely to happen personally and even us become more asian-centric as well.
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Old 01-30-2009, 09:34 AM   #5 (permalink)
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Obama has a Blackberry and fought to keep it with him, so it looks like he won't be getting a new model anytime soon
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Old 01-30-2009, 09:56 AM   #6 (permalink)
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Does this say that U.S. consumers/business can only but U.S. good, isn't this communism
i'm not going to get into this political debate in a detailed way, but to answer your question, no, this would have nothing whatsoever to do with communism.
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Old 01-30-2009, 10:06 AM   #7 (permalink)
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i'm not going to get into this political debate in a detailed way, but to answer your question, no, this would have nothing whatsoever to do with communism.
I didn't read the full article so I probably don't have all the info but from what I gathered this means that this will force businesses/consumers to buy product from only one place, the U.S..
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Old 01-30-2009, 10:07 AM   #8 (permalink)
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Originally Posted by TO2988 View Post
I didn't read the full article so I probably don't have all the info but from what I gathered this means that this will force businesses/consumers to buy product from only one place, the U.S..
that's partially right, but has nothing to do with communism.
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Old 01-30-2009, 10:14 AM   #9 (permalink)
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that's partially right, but has nothing to do with communism.
communism = no choice

Communism attempts to offer an alternative to the problems with the capitalist market economy and the legacy of imperialism and nationalism

planned economy : It is an economic system in which the central government makes all decisions on the production and consumption of goods and services
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Old 01-30-2009, 10:16 AM   #10 (permalink)
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the us is still capitalist, therefore not communist. your understanding of communism is far too simplistic.
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Old 01-30-2009, 12:58 PM   #11 (permalink)
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So if his hope is to implement protectionist measures, does this mean he'll also implement a certain amount of non-interventionist measures and revert the US into a state of isolationism not seen since the pre-WWII days under FDR?
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Old 01-30-2009, 01:02 PM   #12 (permalink)
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Communism or communism?
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Old 01-30-2009, 01:14 PM   #13 (permalink)
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as we've discussed before, i'm too lazy to bother with the shift key most of the time. that said, in this case either one is applicable.
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Old 01-30-2009, 01:17 PM   #14 (permalink)
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i think he's just trying to come out of the gate appealing to the right in order to soften the direct opposition to him. once he shows that he can be tough, stand up militarily and defend the us economically he will have more political capital to spend on the projects he identified in his campaign. he'll move back left in time.
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Old 01-30-2009, 01:28 PM   #15 (permalink)
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US and other countries are going into BS phase of capitalism where CEOs get huge bonuses and company owners get all the profits when they're doing well but get bailed out by government if they are in trouble.

BS if you ask me... at least in communism profits go to government.
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Old 01-30-2009, 01:31 PM   #16 (permalink)
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Quote:
Originally Posted by 'trane View Post
i think he's just trying to come out of the gate appealing to the right in order to soften the direct opposition to him. once he shows that he can be tough, stand up militarily and defend the us economically he will have more political capital to spend on the projects he identified in his campaign. he'll move back left in time.
But what is he really defending against?

Personally, I think it's a panic move that's fuelled by a general sentiment in the US that there are too many "foreign" products. Just take a look at those ridiculous bumper stickers of: out of a job yet? buy foreign!
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Old 01-30-2009, 01:32 PM   #17 (permalink)
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let's stop using communism in this thread. it's totally irrelevant.

anyone see barack's scolding of the big banks for giving out $18 billion is executive bonuses this year? loved it.

and exxon mobil posted a record profit, beating their previous record. i guess they're not getting punished at the pumps!
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Old 01-30-2009, 01:33 PM   #18 (permalink)
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But what is he really defending against?

Personally, I think it's a panic move that's fuelled by a general sentiment in the US that there are too many "foreign" products. Just take a look at those ridiculous bumper stickers of: out of a job yet? buy foreign!
oh i agree. that's my point. it's basically an act to woo the right and build a little political capital with those people that have those very bumper stickers. he'll move back left in time. this is just part of the inaugural show.
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Old 01-30-2009, 01:37 PM   #19 (permalink)
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let's stop using communism in this thread. it's totally irrelevant.

anyone see barack's scolding of the big banks for giving out $18 billion is executive bonuses this year? loved it.

and exxon mobil posted a record profit, beating their previous record. i guess they're not getting punished at the pumps!
communism has no place in this thread. Protectionism and communism do not belong in the same breath.

Exxon's profits were unbelievable. Maybe THEY should bail out the auto industry, but of course, they'd never help prop up an industry which they so desperately require.
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Old 01-30-2009, 01:39 PM   #20 (permalink)
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what Obama is doing is he's trying to real in all of the private shennanigans that come with international trade. which I'm all for. it's really going to effect all of the private interests that benefit from the current economic model, but the more local one tends to get one's goods, then the more environmentally sustainable an economy becomes (we aren't meant to have bananas!!). not to mention more stable.
this isn't so much protectionism or isolationism as it is facing the reality that they've spread their economy to thin.
he sees that it isn't in the government's mandate to help make corporations and those who profit from such a lopsided system of international trade richer. i'm all for stopping international trade. if i really want bananas then i'll have to move to guatemala.
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