Buy American – A Bad Signal: American and Canadian Businesses Do Best When Trade-Restrictive Policies Are Not Pursued
The Obama Administration’s recent legislative proposal to include ‘Buy American’ trade restrictions on portions of the stimulus contained within the draft American Jobs Act of 2011 runs contrary to a long-standing shared commitment by the Canadian and US governments to free and open trade. Canadian Federation of Independent Business (CFIB) president Catherine Swift stated, “We are very disappointed to hear about the inclusion of ‘Buy America’ provisions in the recent American Jobs Act announcements. Protectionist policies like this have never been shown to be effective, and indeed will end up punishing U.S. consumers by imposing higher prices at a time when consumers are already beleaguered by a difficult economic climate.”
“Both Canada and the U.S. have a strong entrepreneurial presence with small- and medium-sized enterprises (SMEs) accounting for roughly half of GDP, employment and the bulk of net new jobs. Open bilateral trading arrangements are vital to SMEs on both sides of the border,” said Swift. Adding, “CFIB is pleased to see the Canadian government moving quickly on this matter to ensure the many small- and medium-sized businesses who actively trade with the U.S. are not harmed at a time when business conditions are already fragile.”
For many years, CFIB has been very active on border and trade issues and has lobbied to ensure that low-risk; low-volume trade by Canadian smaller firms is not overlooked. CFIB will continue to work with the government to oppose this latest threat and promote policies that support open trading relationships in the U.S. and elsewhere. “We believe long-term economic growth and good jobs are best protected and created by broadening and deepening our trading relationships and removing trade barriers, not restricting free and open trade. As well, these proposed restrictions, if enacted, will send negative signals to governments around the world that trade restrictions are an acceptable policy choice,” concluded Swift.
Date: September 20, 2011