Thursday, June 4, 2009

Quebec is Protectionist Too

While newspapers and politicians decry protectionist measures in the US, we should perhaps look at our own buy-local program.

While Raymond Bachand, Quebec Minister of Finance complains that American protectionism may cost Quebec 70,000 jobs, our province is not exactly the best of free-traders.

Both Canada and the United States are both signatories to the AGREEMENT ON GOVERNMENT PROCUREMENT (GPA), which means that they cannot discriminate against suppliers based on country of origin or organize buy-local programs on their own behalf.

Canadian provinces and American states are not bound by this agreement unless they specifically announce that they will voluntarily abide by it's provisions. Thirty-seven American states have agreed to do so, but no Canadian province has made the commitment.

While Mr Bachand complains about American protectionism, his government is right in the middle of a $14 million advertising campaign urging Quebeckers to buy local agricultural and food products. Local radio stations in Montreal are also running public service announcements encouraging their listeners to buy-local.

As protectionist sentiment rises, companies are jumping on the bandwagon. 'Oasis' brand orange juice is already running a television ad urging Quebeckers to save local jobs, by buying their juice. (although I can't understand how orange juice qualifies as a 'local' product)

The real problem is sentiment, not law. Most of the protectionism is a result of misguided patriotism. The fever to buy 'American' is a result of the deep crisis in the US economy. These sentiments crop during every depression and Canada is not exempt. How many times does our Quebec government give local business' the edge with a wink and a nod?

Canadians are always quick to accuse the Americans of trading unfairly. When the US imposed duties on soft-wood lumber, the politicians and the industry screamed blue murder and slung all sorts of accusations of unfair trade across the border.

This year, without much fanfare, those countervailing duties were upheld by the WTO. The Amercian assertion that we unfairly subsidize soft wood lumber was accepted by the tribunal as true.
Somehow, that uncomfortable turn of events didn't make front page headlines.

Before we call for boycotts, let us not claim that we are guiltless. Trade restrictions between our provinces themselves are so severe that it is practically impossible to get a provincial government contract if you are not a local company.

There are signs that cooler heads are prevailing south of the border. The American Chamber of Commerce has already gone on record as opposed to buy-American programs.

Let's not fan the flames of protectionism, it's a war that we cannot win.

Instead of advocating for more buy-local programs, we should destroy those programs that we have.

Ottawa has the legislative authority to ban inter-provincial trade barriers and should act to ban all buy-local programs by provincial governments.

Only then, will we have the moral authority to demand the same of the Americans.

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