Protecting Against Protectionism

A few days ago, I raised the question of whether America's promise that its "Buy America" provisions in its stimulus package will "be applied in a manner consistent with United States obligations under international agreements" should satisfy Canada.

Well, it seems that trade Minister Stockwell Day is happy. David Akin provides more detail. Minister Day says:

If the bill in its final form which is presented to the President, if it has the language that says clearly from the President's point of view that nothing in that agreement should in any way violate their international agreements with us or with anyone else, then that will be some comfort to us.

Does this mean "mission accomplished"? Does this mean that we can all breathe easier now, knowing how deeply committed the US Congress is to international law and free trade? (As if!)

Fortunately, Prime Minister Harper seems to be a bit more skeptical.

Let's see what unfolds with President Obama's visit to Canada this week.

HK

Is Canada Protecting Itself From Protectionism?

The Toronto Star is reporting that Stockwell Day is essentially already claiming victory in the business of the nearly trillion dollar “Buy American” bill.

Speaking in Toronto this morning, he also said Ottawa must remain vigilant as the legislation moves forward.


"This shows the importance of and the power of diplomacy," Day told a Bay Street audience of about 100 people at the Toronto Board of Trade.


He emphasized that Ottawa's "full-court press" to counter growing protectionism in Washington is being successful. The minister said there has been "enormous pressure" on Ottawa to enact retaliatory legislation against U.S. business, but he and Prime Minister Stephen Harper resisted, preferring the diplomatic route.


"Prime Minister Harper was the first world leader to raise this issue and speak against it," he said.


Noting that Canadian firms ship $11 billion in steel to the U.S. annually, Day warned that a "Buy American" policy on Washington's stimulus spending projects would have severely hurt Canada.

If Minister Day and the Prime Minister really believe that a clause to the effect that the bill will be "applied in a manner consistent with U.S. obligations under international agreements” will make this issue go away, we could be in big trouble.

Canada got seriously outsmarted on IP negotiations (particularly on the pharmaceutical patent file) and many other issues with the Americans in the FTA and NAFTA, which set the stage for the WTO agreement and much that has happened since. Now, the Americans have their sights on copyright.

Besides, we don't want to have to start a NAFTA or WTO dispute to figure out what “in a manner consistent with U.S. obligations under international agreements” means on the basis of a particular case or potentially thousands of them. These cases take many years, cost a fortune to prosecute, and have uncertain outcomes. Moreover, when the Americans don't like the outcome, they basically ignore or even flout it.

If Canada and other major G-20 powers stick together, President Obama will have not only the basis but the necessity to play hardball with Congress and to veto a protectionist bill. If Canada runs off and declares victory on the basis of something as flimsy as this, we will have played right into the protectionists' hands.

And we may never know what was discussed in the corridors that led to The Star reporting that:

He [Day] emphasized that Ottawa's "full-court press" to counter growing protectionism in Washington is being successful.

Besides, we should be entitled to assume that American law will be applied "in a manner consistent with U.S. obligations under international agreements." What else have the past 2.5 decades of trade negotiations been about? That's hardly a concession.

In Canada, at least, there is a presumption that all statutes, both federal and provincial, do comply with international treaties and should be interpreted in such a way as to ensure compliance. Thus, the kind of language that Minister Day seems so happy about would add nothing to the meaning of a Canadian statute. I would be surprised if things are different in the USA.

The new wording is at best redundant and political. More likely, it is a smoke screen. Minister Day ought to be very careful about proclaiming what amounts to "Mission Accomplished" at this stage. Once again, "it ain't over 'till its over."

HK

Obama and NAFTA?

This story is coming back.

It seems that there is an effort in the US Congress to restrict all "stimulus" spending on iron, steel and perhaps other goods to "made in the USA" sources. That's illegal under NAFTA, perhaps under WTO, and would be a very bad way in any event to begin a new era in Canada/USA relations. NAFTA is still in full force, last I heard.

Industry Minister Tony Clement is already speaking out. Prime Minister Harper has expressed "grave concern." The issue clearly could and should arise during President Obama's visit to Canada on February 19, 2009 - if it has not been fully defused by then.

It will be really interesting to see what President Obama does about this, given his past pronouncements about NAFTA and the conventional wisdom about the Democratic Party's relative predilection for protectionism. Let's see whether there will be "change" afoot on this front.

If such a blatantly protectionist move as this is enacted into law, it will be even more interesting to see if the current Canadian government is once again in an unseemly hurry to enact the American wish list for a DMCA North "Made Worse in Canada" version of American copyright law.

There are things that need to be done to improve Canadian copyright law. But we don't need to import the worst features of American law, particularly if the Americans are going to become even greater scofflaws of international law. And we don't need to shovel money at the Americans for copyright rights that they don't provide to Canadians.

This is an old story that goes back well into the 19th century. It probably won't end soon. It is now beginning to be documented and analyzed by by scholars such as Sara Bannerman.

Let's hope that Canada learns not to get pushed around on copyright policy by the USA, as it once was by the UK. It's time for Canada to finally stand on its own feet on copyright and other fronts, and move on from being part of declining empires.

HK