(AFP) – Aug 10, 2009
WASHINGTON — Canadian Prime Minister Stephen Harper warned that the "Buy American" provision of the US economic plan is "risky" and could contribute to rising protectionism worldwide.
"I think that wherever they're done, these procurement preferences in the stimulus legislation are risky. They risk, you know, growing retaliation and protectionist measures across the board," Harper told ABC News on the sidelines of a summit of North American leaders in Mexico.
"One of the things that we absolutely must do in this recession is to make sure that we don't start cutting trade and we don't see a rise in protectionism across the world," Harper said.
"That is the single biggest risk, in my view, to the global economy long-term. That is what made the Great Depression so great."
But at the close of the summit in the western Mexican city of Guadalajara, US President Barack Obama downplayed any talk that the provision would hurt trade between the United States and Canada, which are each other's biggest trading partners.
"We have not seen some sweeping steps toward protectionism," Obama told reporters.
The provision, he added, "was not something that I thought was necessary, but it was introduced at a time when we had a very severe economic situation and it was important for us to act quickly."
"This in no way has endangered the billions of dollars of trade taking place between our two countries," he insisted. "It's not a general provision, but it was restricted to a very particular aspect of our recovery package."
The Buy American clause, included by the Obama administration in the nearly 800-billion-dollar economic recovery package adopted earlier this year, originally required projects funded with stimulus money to use only US-made steel, iron and manufactured goods.
It was later watered down to say that such procurement could only take place in a manner consistent with Washington's international treaty obligations.
Obama said Buy American complied with World Trade Organization rules and suggested that US states and local jurisdictions could work with Canadian provinces on cross-border procurement practices that expand trade.
Harper also had a conciliatory note.
"We are the two closest trading nations in the world," he said. "So if we were to find some way of dealing with this particular problem, I think that would send a very good signal and, quite frankly, build our own reputations as fighters of protectionism."
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