How 'Buy American' Can Hurt U.S. Firms

[WriteDown]

Source: CBR

WASHINGTON -- On paper, Tom Pokorsky would seem to be a clear beneficiary of the government's $787 billion economic-stimulus package.

Mr. Pokorsky runs Aquarius Technologies Inc., a company in Port Washington, Wis., that makes equipment to treat sewage. The stimulus plan earmarks some $6 billion for municipal wastewater projects that are right in his company's sweet spot..

Now that grief has boiled over into a major diplomatic row with the largest U.S. trading partner. Canadian communities angered by perceived American chauvinism have started a Buy Canadian campaign to exclude U.S. bidders from municipal contracts.

"If that sticks, well, there goes 25% of my business," said Mr. Pokorsky. "To me, Ontario may as well be Indiana."

Halton Hills, a town of 50,000 people about 25 miles west of Toronto, is one of about a dozen Canadian communities forging ahead with plans to amend their procurement policies to freeze out American companies. "We won't be taking any products from any country that is discriminating against us," said Mayor Rick Bonnette....

Read more: http://online.wsj.com/article/SB125306012124114135.html?mod=igoogle_wsj_gadgv1&

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I'm anxious to hear from the Canadian posters.

[Lagomorph]

1. By all means, never, ever give up an opportunity to retaliate...

The cycle of retribution must never be broken.

One stupid move deserves another.

[brentspeak]

2. The Buy America provisions should only apply to natons like China and India

which engage in unfair trade practices. If trade relations with an honest trading partner like Canada are being screwed around with, then the Buy American provisions need to be scrapped and rewritten.

[icnorth]

6. Totally agree...

as we speak:
http://www.negc.org/premiers.html

[OhioChick]

11. Agreed. n/t

[HeresyLives]

3. Protectionism always provokes retaliation.

It's why we should never go that route, under any circumstances, or we end up in a trade war and everyone gets hurt.

After all the cross-border trading under NAFTA, this is suicidal.

[kenfrequed]

4. Extra Extra...Man Bites Dog.

This is the kind of exception story the media typically uses to promblematize policies or campaigns that humongous mega corporations dislike.

It is incredibly surprising that this article was written for the Wallstreet Journal. Oh wait. No, not surprised, that other thing.

[aquart]

8. Yep. And we swallowed it whole.

[Sen. Walter Sobchak]

5. Not a Canadian, just work here.

The international boundary between Canada and the US is a geographic technicality cut across a significantly unpopulated frontier along a convenient line. The economic advantages Canada has over the US come not out of exploitive labor practices, lax environmental laws or unfair subsidies. They come out of the United States ourselves being too lazy, stupid and selfish to create a workable healthcare system.

Canada is the best trading partner you could ask for, but for Canada we are also very much replaceable. They can sell their natural resources to anybody and can raise investment anywhere.

The problem with US protectionist policies is they completely ignore the principle of reciprocity which has governed international relations since the dawn of the state and the cost of the blowback of many US protectionist measures is incalculable. Take for instance the latest pissing contest between the US and Canada. The ALPA complained to the administration about Air Canada flying hockey teams around the US on charter flights in the name of fighting cabotage. Which is frankly a non-issue to start with but that is another story and charter flights have been treated differently forever.

So the DOT pulls the plug on Air Canada hockey team charters, Canada immediately retaliates. But this is where things get stupid - in the name of fighting Air Canada flying around hockey teams the retaliation has smacked down the US air charter industry who just got shut out of flying within Canada under a similar understanding.

Blowback has a multiplier effect as cabotage, an issue that just doesn't matter to begin with and applies to an infinitesimal number flights by a single airline all of the sudden has US charter operations shitting themselves as the retaliation smacks all of them and they didn't even have anything to do with the original complaint that was irrelevant to start with.

The US needs one trade policy for countries like Canada, the EU members, Japan etc. another for China and another still for developing countries who need a leg up.

Smacking our closest allies only comes right back to us and three times as hard.

[anonymous171]

7. Oh boo hoo. nt

[treestar]

9. People who think each country can be self sufficient

Are living in the 14th century.

It's that attitude that if anyone nonAmerican prospers, that hurts Americans, and that it is unfair for any damn furriner to do anything.

What of the American firm that has customers abroad? These medieval bozos never think of those Americans.

[Beavker]

10. No one is ever happy.

How bout this: Don't buy American, it's un-American to buy American products. I realize that politics is getting involved and that angers people, but I'd like to see the U.S. try to get to a level of self sufficiency some day, so that when the rest of the World finally shuts us out and cuts us off, or uses up all the natual resources, we can still survive. More proof that Corporate America, Wall Street and Economic ideals have overwhelmed our society.

"Did that guy say we should 'buy American'? What a Commie!".