Is "Buy American" the best economic course to pursue?
Posted: Saturday, January 31, 2009
by Gerry Charbonneau
http://nibblednews.typepad.com
"The world must learn to work together or finally it will not work at all."
- Dwight Eisenhower
American economic protectionism may just be the wrong course of action to follow during this period of global economic uncertainty. This form of retro economic policy planning , governing and sanctioning can only lead to economic disaster not only for the US in particular but also for the global community in general.
The US House of Representatives with its $819 billion stimulus bill in hand states that any steel used in any project funded by the bill must be made in the United States. End of story. The Senate reportedly wants to amend this package to require that virtually all stimulus-funded projects use only US made goods and services.
Foreigners keep out is the implied message. This stance is against the law -- international trade law in particular. A law that the United States has always championed It might also be the worst policy imaginable to endorse in the face of a pending global recession.
Protectionism is the economic policy of restricting trade between nations, such as tariffs on imported goods, and a variety of other restrictive governmental regulations expressly designed to discourage imports and prevent foreign take-over of local markets and companies. It can also be considered to be a virus that spreads very quickly and as mentioned earlier was a cause of the Great Depression. A look back at history will corroborate this fact.
Admittedly the US economy is on the ropes. Its desperate for panaceas and answers that will cure and protect itself from all its ills. The country believes it has to do whatever it can do to protect its workers from foreign encroachment and take over. But the Obama Dream Team supposedly offered a new and revolutionary course of action. The electorate took to this notion as a junkie takes to the promise of his next fix. The hopes run high while the results and benefits may became questionable.
The members of Congress and the entire Obama administration should realize that in 2008 36 US states had Canada as their leading export market. The areas included Michigan, Ohio and of course New York. These are the most populated states located in the north eastern part of the country. Other states not as obvious included Georgia, Colorado, North Carolina, Montana and West Virginia.
Canada is the largest supplier of not only crude oil to the United States but also many natural gas products which fuel many power generation plants in the country. Canada's supply of these products is even greater than that provided by Saudi Arabia. Canada also buys more US exports than all of the 27 combined coutries of the European Union.
Let's not set up a trading wall between these two countries during this time of flagging economic returns and successes. Let's hope that the Obama financial short term band aid fix does not evolve into the tightly wound tourniquet that killed the patient. Cooler heads must prevail during these times of economic stress. It's time to think in terms of results and not popularity ratings.
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Top-level comments on this article: (1 total)I couldn't have said it better, Gerry. Of course, as a Canadian I was very disturbed to hear what Obama was planning, but it seems he has backed-down somewhat on the idea. It would be a bad idea for everyone concerned.Thank you for your comment. Much appreciated.
The Obama team has to accept the fact that there are no easy solutions to the problems as slippery and elusive as the ones they are tackling. Ignoring one's trading partners is never a wise solution.
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