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What to do about Buy America? Add to ...

IT'S NOT ALL ABOUT US

Canada's response should be an all-out defence of free trade everywhere. With protectionism at home, balky provinces and deference to a powerful neighbour, Ottawa might think defence, half-measures, limited deals. But a serious threat merits a vigorous response.

Let's start by asserting that all protection is dumb: theirs, ours - anyone's. Should each of us grow our own food, make our own clothes, do our own surgery? Trade and prosperity go together. If consumers, businesses and governments cannot buy the best product at the best price, tough times will get worse.

Skeptics who say we can't let fiscal stimulus leak abroad need to hear what business leaders are telling the U.S. Congress: that the world is interconnected. Stop domestic producers getting supplies from abroad, and cars, roads, electronic infrastructure, and much else that governments say they support will get built slowly or not at all.

If pro-openness statements from provinces and cities don't lead to action, the feds should come on strong. Good luck getting states to treat our steel fairly when Ontario openly discriminates against theirs. Subnational protectionism is a national issue; Ottawa has the money and constitutional power to get rid of it.

Finally, let's not act like it's all only about us. We're asserting a principle, not begging for exemptions. Trade wars elsewhere will hurt the world. The case for open borders is universal; that's what Washington should hear - and see - from Canadians.

William Robson is

president of the C.D. Howe Institute.

*****

FREE TRADE? FAIR TRADE

When governments use public dollars to purchase goods and services, a portion of those funds should be invested back into our economy. This is the principle underlying the Canadian Auto Workers' Buy Canadian - Build Communities resolution, which encourages municipalities to maximize the Canadian content of goods and services purchased, including at least 50 per cent Canadian content for new transit vehicles.

Many jurisdictions understand this. Quebec and Ontario have content provisions for transit projects. So has Mayor David Miller in Toronto, along with more than a dozen other Canadian municipalities. Unfortunately, Ottawa has not followed suit. This refusal widens the gap between free trade and fair trade.

Buy-domestic policies are one of the most important economic development and job-creation tools at a government's disposal. The United States, the European Union, Japan and China all have well-established domestic-content rules that serve them well. This isn't about protectionism, but fair trade, economic policy and government's role in society.

Ironically, last week's Halton Hills resolution on domestic-content rules - backed by a large coalition of industry, commerce and government organizations, and endorsed by the Federation of Canadian Municipalities - may very well be the most protectionist "Buy Canadian" policy on the books. Banning trade with any jurisdiction that imposes buy-domestic policies would leave very few options available to Canadian suppliers, and leave Canada as one of the last remaining boy scouts in a free-trade debate that's more ideological than practical. Ken Lewenza is president of the Canadian Auto

Workers union.

*****

THE WRONG MESSAGE

Canadian municipalities have promised retaliation against American suppliers. But Canada is dependent on market access to the United States, and threats could anger the most protectionist Congress in recent memory, possibly encouraging new border or other protectionist measures.

The municipalities threatened retaliation even though the provinces failed to sign on to the WTO Agreement on Government Procurement in 1994 or to liberalize procurement under NAFTA Article 1024. As a result, Canadians are excluded from the government procurement of 40 states, including New York, Michigan and Pennsylvania.

The municipalities would argue that the WTO and NAFTA procurement agreements would not open up American municipal procurement. While true, this is a poor reason not to lock in as much market access as possible.

Instead of threatening retaliation, Canadian municipalities should pressure the provinces to sign on to WTO and NAFTA procurement rules. The provinces and municipalities should then prepare an offer of enhanced procurement access for American goods and services. Canada could then take up the U.S. trade representative's willingness to discuss a reciprocal deal on government procurement, or to breathe new life into the NAFTA procurement negotiations.

Chuck Gastle is a trade lawyer at Bennett Gastle P.C. He teaches

international trade law at Osgoode Hall Law School.

*****

CRISIS, OPPORTUNITY

From crisis often comes opportunity, and this may be the case for Canada with this crisis.

It's an extremely rare situation to see three levels of government lining up in united support for each other. The conditions for this co-operation come from the trenches - companies, towns and cities that were already reeling before having more damage inflicted on their manufacturing sector from the barriers being raised by Canada's largest trading partner.

The municipalities' mere threat to cut off billions of dollars of U.S. exports to Canada created a firestorm of attention, government action and awareness on both sides of the border as to why we shouldn't be sparring in the first place. Having achieved heightened credibility from this unprecedented jurisdictional co-operation, Canada must seize the moment to negotiate broader agreements on government procurement.

The ultimate goal must be to implement full reciprocity, whereby Canada and the United States agree to treat goods and services produced in the other country as domestically produced. In the interim, we must demand immediate relief by insisting that all U.S. federal funding carry international trade obligations with it, regardless of whether it's spent at state or local levels.

John Hayward is president of pump maker Hayward Gordon Ltd.

*****

INTEGRATED EFFICIENCY

The concept of limiting the benefit of public spending to domestic enterprises, particularly during difficult economic times, is superficially appealing, yet seriously flawed. Without being too argumentative, it should be noted that Canadian jurisdictions, not just American ones, also limit access on certain local public procurements to "citizens." The binational nature of the practice is why subnational government procurements were exempted from NAFTA's protectionist limitations.

The remarkably integrated nature of North America's economy is more pronounced than it was in 1988, when the Canada-U.S. FTA was finalized. In many respects, due to NAFTA, our countries now build things together, rather than trade discrete items in the conventional sense. Public procurements are representative of a more important point - that NAFTA, while mutually beneficial, is a 15-year-old policy framework that must be rejuvenated and enhanced for 21st-century realities. Our recent collaboration to preserve the efficient operation of a truly integrated auto sector is a demonstration of how critical transborder efficiencies are to mutual prosperity.

North America must evolve to a point where goods and services that are truly North American have equal dignity in all three countries. Collective efficiencies from eliminating restrictions on goods and workers would enhance our three economies' individual productivity and profitability. We should eliminate the tyranny of small differences in our regulatory regimes which impede those efficiencies.

The potential from more efficiently managing our economic partnership extends to transportation, energy and the environment. So rather than simply debating the validity of municipal procurement restrictions, let's use this as a segue to a much broader and future-oriented dialogue.

Gordon Giffin was U.S.

ambassador to Canada.

*****

LOCAL IS GOOD

Canada is a trading nation - predominantly with the United States as our partner. Our country depends on the responsible exporting of goods, resources technology and knowledge to survive. But that trade needs to be fair.

I support fair trade and enhanced "Buy Canadian" policies, though not the punitive measures adopted by a slim majority at the recent Federation of Canadian Municipalities conference. Governments at all levels have a responsibility to use public funds to support the employment of Canadians. Other countries, like the United States, realized this decades ago. It's time Canada played by those rules.

Toronto has always had policies, such as a fair wage policy, that support Canadian jobs. Recently, we agreed to increase the amount of Canadian content required in our new streetcars and contracted with a Canadian company (Bombardier) - moves that will create thousands of well-paying high-tech jobs in the Greater Toronto Area, Ontario and across Canada. We also have a local-food procurement policy that supports Southern Ontario's important agricultural sector.

We must also remember that the closer to home we purchase goods, the less movement of them by land, sea and air is required. These policies are good for the economy, good for the environment and good for Canadians.

David Miller is the mayor of Toronto.

 

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