Canada Encouraged by Washington's Trade Tone

House leader understands Canada's concerns

Canadian Trade Minister Stockwell Day on Feb. 4 welcomed U.S. recognition of concerns that a "Buy American" provision in the U.S. economic stimulus plan could spark trade wars. "At almost every key level now of the administration, we're getting feedback that they're not just hearing us but that something needs to be done," Day said. "It shows that at all levels where we've been engaged it's clearly having some positive effect," he said, noting: "The Democratic House leader has said that Canada's concerns are justified."

President Barack Obama on Feb. 3 warned that provisions in versions of his economic stimulus bill being drafted in Congress could ignite "trade wars," describing the clause as a "mistake" in the current economic environment.

The EU and Canada have fiercely attacked the clause, warning it could start a global round of tit-for-tat trade reprisals akin to the tariff wars of the 1930s Great Depression.

The "Buy American" clause in the nearly $900 billion bill being debated in the Senate bars the use of any stimulus funds to buy steel, iron or other manufactured goods for infrastructure construction projects from abroad. A narrower version of the clause, popular in U.S. states suffering gravely from the economic downturn, was included in a House of Representatives version of the stimulus passed last week.

Copyright Agence France-Presse, 2009

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